U.K. security group G4S spurns Garda
Supports US$5.1B Allied agreement
Security group G4S on Tuesday agreed to be bought out by Allied Universal for 3.8 billion pounds (US$5.1 billion), picking the U.S. company over Montreal-based rival Gardaworld and potentially ending a tense, months-long bidding war.
Allied's offer of 245 pence per share for London-listed G4S is 10 pence higher than Gardaworld's sweetened bid from last week, which pegged the British company at 3.7 billion pounds.
G4S, one of the world's largest private security companies, had last month turned down what it termed a “highly conditional” offer from Allied Universal of 210 pence per share, while also repeatedly rejecting advances from Gardaworld.
“The G4S Board is confident in the long-term prospects of the business and believes this (agreed) offer represents an excellent opportunity to create a leading global security company,” G4S chairman John Connolly said in a statement.
G4S later formally confirmed that it had rejected the GardaWorld bid of 235 pence per share, saying it undervalued the company.
The British company has restructured its business following a series of setbacks, and the bidding war between the U.S. and Canadian companies for G4S began when Gardaworld made its offers for G4S public on Sept. 14. Since then, G4S shares had gained about 75 per cent in value at Tuesday's closing price of 255.8 pence, before the deal was announced.
G4S said it considers the terms of Allied Universal's latest offer to be fair and reasonable and that it intended to unanimously recommend that shareholders accept it.
Combining with Pittsburgh-based Allied would create a company with about US$18 billion of annual revenue and a workforce of more than 750,000.
Gardaworld declined to comment on its further plans.
It had labelled its bid last week as a final offer but reserved the right to increase it if a rival made a firm offer.
Allied's shareholders include Canadian pension fund Caisse de Dépôt et Placement du Québec and Warburg Pincus.
Garda, which is backed by buyout firm BC Partners, has repeatedly criticized G4S management as it pushed its hostile bid.