Private equity-backed GardaWorld is urging G4S shareholders to support its £3bn takeover bid for the UK security company as it ramps up attempts to buy its rival.
The Montreal-based group said the board of the FTSE-listed business had “summarily dismissed or ignored” its three attempts to buy the group in three months.
It offered 190p per share on August 31, which in total works out as £2.96bn, but was rebuffed, the buyout-backed group said.
G4S shares surged 25 per cent to 182.25p on Monday after the security company confirmed the move.
“G4S needs an owner, not a manager,” Stephan Crétier, founder and chief executive officer of GardaWorld, said in a statement on Monday. “GardaWorld has 25 years of experience in the sector and we know how to improve and repurpose this business.”
GardaWorld’s latest offer marks a 32 per cent premium to the stock’s previous closing price on August 28. Its first approach to the G4S board was on June 15, it said.
The group, in which private equity firm BC Partners owns a 51 per cent stake, “now encourages G4S’s shareholders to mandate their board’s engagement in collaborative discussions towards a transaction”, it said.
“This is an offer that your board should not ignore,” BC Partners’ chairman Raymond Svider and Mr Crétier said in a letter to G4S’s chairman John Connolly on August 31.
“This is an offer that we believe your shareholders would consider very seriously . . . You can now choose to engage, which we hope you will do and would welcome, or not.”
The deal would be funded with equity from BC Partners and debt that three banks had already agreed to provide, the letter said.
G4S shares tumbled at the beginning of the pandemic in February and March, hitting a low of just under 70p in early April, but have since regained some of their value. G4S declined to comment.
The move, potentially a starting point for a hostile bid, comes more than a year after GardaWorld walked away from a previous £3bn offer for G4S.
G4S is one of the UK’s biggest outsourcing companies, with about 500,000 staff and global revenues of about £3.5bn.
The company has been seeking to rebuild itself following a series of crises starting with the London Olympics in 2012 when it failed to recruit enough security staff and the army had to be drafted in to compensate.
It recently won a deal to operate a new £252m prison in Wellingborough, Northamptonshire, despite a decision last year to strip it of a contract to manage Birmingham prison seven years early, after inspectors found it “exceptionally violent”.
Last week the UK’s Serious Fraud Office charged three former executives of G4S with defrauding taxpayers following a long-running investigation into a scandal over its electronic tagging of offenders.
The decision to prosecute the employees comes despite G4S reaching a settlement with the SFO this year that means the company will not face criminal charges as long as it meets conditions to improve its corporate governance.
Source: Financial Times
