* Elior eyes U.S. catering business
* Sale of Elior still on the cards after acquisition
* Lenders approached to waive covenants to facilitate Elior
By Claire Ruckin
LONDON, March 14 The sale of French Catering
company Elior, which could fetch up to four billion
euros ($5.18 billion), has been delayed while it seeks to make
an acquisition, banking sources said on Thursday.
Owner Charterhouse Capital Partners decided to
sell Elior, either in part or in whole, in November, and hired
Credit Agricole, HSBC and Rothschild
to manage the process.
The sale has now been delayed for a few months while the
company attempts to acquire a contract catering business in the
U.S., bankers said, without giving further detail.
Charterhouse declined to comment. It bought Elior for 2.5
billion euros in 2006. The private equity firm owns 62.3
percent, Elior's co-founder Robert Zolade has 24.7 percent and
Chequers Capital 7.8 percent. The remaining 5.2 percent is owned
by other investors.
Elior's business includes a contract unit which provides
catering to businesses, schools and hospitals and accounts for
around two thirds of the firm's overall business, and a
concessions business which serves airports, railways and
Elior's sale had attracted early interest from buyout firms
BC Partners and CVC Capital Partners which could team
up to make a joint bid. Blackstone and Clayton, Dubilier
and Rice had also considered bidding. A buyout of Elior would
require about two billion euros of debt.
Elior is asking existing lenders to waive a change of
control clause to allow the sale to proceed, bankers added.
Usually when new owners take over a business a change of
control clause triggers any existing debt to be repaid at par.
If the change of control clause is set aside then the existing
debt can remain in place, giving potential buyers confidence
that the business will have sufficient funds.
It is unusual to try and waive a change of control clause
but necessary in this case as many of the loan investors could
have passed their reinvestment periods by the time Elior is
brought to market again.
The waiver will also ask existing lenders to extend a
portion of the debt for two years until 2019 and give permission
for Elior to raise high-yield bonds which would be used to repay
lenders that do not extend debt, a portion estimated to total
around 300-500 million euros,bankers said.