PARIS (Reuters) – French catering company Elior said it had got a firm offer of 1.542 billion euros (£1.34 billion) from private equity firm PAI Partners for its ‘Areas’ concession catering business, helping to give a lift to Elior’s shares.
Elior said it expected to close the sale during this summer, and added it would use the proceeds of the deal to cut its debt.
Elior, which competes with Sodexo and Compass, has embarked on an overhaul of its business after issuing several profit warnings in recent years, and the sale of the Areas arm formed part of plans to sell non-core assets.
Elior’s shares rose 2.3 percent, with the valuation of Areas coming in at the top end of earlier estimates.
Sources had previously told Reuters that the sale of the Areas business, which was led by Morgan Stanley and BNP Paribas, could have been worth between 1 billion euros to 1.5 billion.
The Areas business handles railway and motorway catering services in 13 countries spanning Europe, the United States, Mexico and Chile.
Elior’s chief executive Philippe Guillemot told analysts on a conference call that his cutting down on Elior’s debts remained one of his priorities, and that the company was on track regarding its general strategy plan.
(Reporting by Sudip Kar-Gupta and Dominique Vidalon; Editing by Leigh Thomas)