French Caterer Elior weighs a tie-up with biggest shareholder Derichebourg -Bloomberg News

PARIS (Reuters) -Elior is discussing a possible tie-up with its biggest shareholder Derichebourg as the French caterer looks to shore up its balance sheet amid ongoing high-inflation environment, Bloomberg News reported on Wednesday.

An Elior spokesperson declined to comment on the Bloomberg News report while officials at Derichebourg could not immediately be reached for comment.

Elior is close to finalizing its strategic options in the coming weeks, the group’s Chairman and Chief Executive Bernard Gault had said earlier on Wednesday, as Elior posted its annual results.

“The board of directors is finalizing examining various scenarios with the aim to retain the one that will optimize the Group’s strategic orientations and improve its financial position,” Gault said in a statement.

The proposed combination would see Derichebourg transfer assets to Elior in exchange for an increase to its roughly 24% stake, the report said citing people familiar with the matter.

Earlier this year, French metal scrap recycler Derichebourg increased its stake in Elior, to 19.6%, making it the catering group’s largest shareholder.

Elior, Europe’s third biggest contract caterer, is also exploring other options, including a capital increase or sale of units in countries such as Italy and the UK, the Bloomberg report said, adding that no final decision has been reached and the plans could yet change.

Elior’s biggest investor, Derichebourg, has no plans to make an offer for the entire company if the tie-up plan proceeds, according to the report.

Elior Group on Wednesday reported a third annual core loss since the start of the COVID-19 pandemic, weighed down by high inflation and difficult contract renegotiations in its home market.

(Reporting by Sudip Kar-Gupta, Dagmarah Mackos and Mrinmay Dey; Editing by Leslie Adler and Sandra Maler)