Sodexo in talks with CVC on restaurant check business

PARIS (Reuters) -Sodexo has entered talks with buyout firm CVCon a deal about its restaurant check unit, French business daily Les Echos reported on Monday, citing sources close to the talks.

Both CVC and Sodexo (EPA:) declined to comment.

Sodexo is prepared to sell 20% to 30% of the unit, which could be valued at as much as 4 billion euros ($4.3 billion) to CVC, the report said.

According to the report, Sodexo had approached other private equity firms including Bain Capital and Silver Lake, but these had considered the price too high and walked away from the deal.

Les Echos said the deal would result in CVC taking a stake in the business, providing Sodexo, whose shares have lost 16% of their value since mid-February, with needed cash.

Sodexo shares rose around 4% after the report to reach over 75.2 euros each, while the French blue-chip index traded down 1.8%. The stock was up 1.3% at 1420 GMT.

Sodexo’s Benefits & Rewards Services unit, which supplies employee meal passes and vouchers, had over the six months that ended Feb. 28 brought in around 4% of sales, but a fifth of its core profits.

Sodexo had earlier this month cut its guidance citing impacts from the coronavirus pandemic and the war in Ukraine, which prompted it to cut off investments in Russia. It said it had already sold off the division’s Russian operations.

Work-from-home and event closures during the peak of the pandemic forced caterers to adapt their digital offerings, but Sodexo has also been hit by an earlier-than-expected termination of contracts with COVID-19 testing centres in the UK.

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