Why Did UniFirst Stock Surge 37% Pre-Market Today?

• The $5.2 billion represents a 64% premium over UniFirst’s 90-day average closing price as of December 11.
• As part of the proposal, Cintas offered a $350 million reverse termination fee to UniFirst if regulatory clearance is not obtained. 
• While UniFirst acknowledged receiving the proposal on December 16, no substantive discussions have occurred since that date.

UniFirst Corp (UNF) stock soared in Monday’s premarket, after Cintas Corp. (CTAS) officially submitted an acquisition proposal to buy all outstanding common and Class B shares for $275 per share in cash.

The offer, presented on December 12 to UniFirst’s board, values the company at roughly $5.2 billion and represents a 64% premium over UniFirst’s 90-day average closing price as of December 11.

Proposal Reason

Cintas highlighted its history of organic growth and noted that merging with UniFirst would increase processing capacity and route density, further improving customer service efficiency.

“Recent market commentary confirms that many UniFirst shareholders, including several of the Company’s largest institutional investors, recognize the value that a combination would deliver and share our belief that we are stronger together than we are apart.”

-Todd Schneider, President and CEO, Cintas

Following the proposal, UniFirst stock traded over 37% higher in Monday’s premarket. On Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘neutral’ territory the previous day. At the same time, message volume shifted to ‘extremely high’ from ‘high’ levels in 24 hours. 

Regulatory Path 

Cintas has already addressed key regulatory considerations and believes the deal has a clear path for approval. As part of the proposal, Cintas offered a $350 million reverse termination fee to UniFirst if regulatory clearance is not obtained. 

While UniFirst acknowledged receiving the proposal on December 16, no substantive discussions have occurred since that date. Based in Wilmington, Massachusetts, UniFirst provides uniforms, workwear, and facility service products, along with first aid and safety supplies.

UNF stock has declined by more than 3% over the last 12 months. 

Also See: Oracle Stock Slide Could Reportedly Be An AI Opportunity For Investors, Says Wells Fargo

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