...NEW YORK (S&P Global Ratings) Aug. 19, 2019--S&P Global Ratings today said that activist investor Mantle Ridge's disclosure that it has taken a 20% economic stake in Aramark (##+/Negative/--) and plans to push for changes at the company could lead to a lower rating in the future if such changes result in further leveraging of the balance sheet. However, we believe that Mantle's direct stock ownership (excluding derivatives) is much lower than 20%, which could constrain its bargaining power, and that potential changes may be limited to non-balance sheet leveraging items such as executive compensation and expense controls. Given that Aramark is still in the process of improving its aggressively leveraged balance sheet following meaningful acquisition activity over the past two years, we assume its board of directors will not be in favor of increasing leverage further, especially given the increasing risk of recession. However, we will continue to monitor the situation and will reassess our...
