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Autogrill submitted a bid for Elior's Areas business

Reuters

MILAN, Jan 22 () - Italy'sAutogrill has submitted a bid for the railways, motorway and airport catering business of France'sElior, a source told on Tuesday.

Earlier this month, a separate source told that Elior was seeking bids by the end of January for its Areas catering business.

The source added that around 10 private equity funds - including KKR, Lone Star and Blackstone - were considering making a bid.

Analysts value Areas - which has core earnings of about 200 million euros - at 7.5 to 10 times earnings before interest, tax, depreciation and amortisation (EBITDA) compared to 8 to 11 times for Autogrill or Britain'sSSP Group Plc.

This means the deal could have a value of between 1.5 and 2 billion euros.

With 2017-18 revenue of 6.69 billion euros ($7.60 billion), Elior is well behind Britain's Compass and French Sodexo which each have revenues that are more than three times this.

Shares in Elior have more than halved from mid-2017 highs following several profit warnings and the firm's market capitalisation has fallen to below 2.5 billion euros.

The company's return on equity, at 2.25 percent, is the lowest in the Thomson Europe Restaurant and Bars index.

($1 = 0.8802 euros)


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