Sodexho sweetens SMS offer

HEADNOTE

CONTRACT SERVICES

HEADNOTE

Sodexho Marriott board accepts $1.1 billion bid.

Sodexho Alliance's increased $32-per-share

offer for Sodexho Marriott Services has been accepted by the latter's board of directors. The decision paves the way for the French foodservice giant to acquire a majority interest in the largest North American foodservice management company, assuming shareholders accept the new price. Sodexho Alliance already owns a 48 percent share in Sodexho Marriott.

An acquisition of Sodexho Marriott's $4.7 billion in annual sales would make Sodexho Alliance the world's largest catering/foodservice management company, with more than $11 billion in worldwide sales. Currently, the British company Compass Group PLC holds that distinction, with around $10.5 billion in annual sales.

This past January, Sodexho Alliance made an initial bid for Sodexho Marriott by offering $27 a share, but when the stock price rose past that level in subsequent trading, the company was compelled to increase the bid substantially, adding about $200 million to the initial price tag.

Sodexho Marriott's share price has fluctuated wildly in the three-- plus years since it was formed through a spinoff-merger of Sodexho Alliance's North American Division and Marriott International's Marriott Management Division. The stock hit a high of $32 in mid 1998 but plunged to a low of $10 16 months ago. It was trading in the mid teens as late as last December.