G4S bosses cash in as Americans triumph in bidding war
G4S looks set to fall into American hands after a fierce bidding war ended – sparking huge payouts for bosses.
US giant Allied Universal is poised to buy the British security company for 245p-per-share, or £3.8bn, pending shareholder approval.
Allied’s victory followed a threemonth bidding war with rival suitor Garda World, which had come down to a head-to-head auction this week.
But Canadian security group Garda effectively threw in the towel as its bosses announced they would not increase their 235p-per-share bid – leaving the path clear for Allied. G4S shares fell 9.8pc, or 26.4p, to 242.6p as the possibility of higher bids evaporated.
It is a humiliating defeat for Garda boss Stephan Cretier, who had staked his firm’s reputation as a global leader on the deal.The acquisition by Allied, which is backed by private equity firm
‘Allied bid was fair and reasonable’
Warburg Pincus, will create a global organisation with 750,000 staff and annual revenues of £13.4bn.
G4S chief executive Ashley Almanza and chairman John Connolly will scoop millions if shareholders accept the bid.
Almanza, 57, holds 2.2m shares, worth around £5.3m, while Connolly and his family hold 611,000 shares, worth £1.5m. But Almanza’s payout could reach £15m if long-term targets are hit.
The deal also means the Government will be forced to re-do its contract for four major British prisons, which it awarded to G4S.
Allied has already said it does not wish to take it on, meaning it will likely go to Hampshire-based Serco, potentially creating competition issues.
The US firm last year sought to allay fears that the shift of control abroad will impact its London headquarters and UK operations.
It said it was ‘committed to the UK market having doubled its activities in the UK in the last two years’, and it will maintain the UK base to act as its headquarters for international operations outside of America.
President Biden’s election in the US could also raise problems, if he takes a different view to his predecessor Donald Trump.
A source said: ‘The Biden administration has been phoning customers and competitors asking what they make of it. ’
The fight to take over G4S began last June when Cretier made an informal approach of 145p, when the share price was just 103p.
Garda’s interest became public when it made a third bid of 190p on September 1, when G4S’s share price was 142p. The G4S board held firm, rebuffing a series of offers until Allied made a 245pper-share bid in December. Allied previously had a 210p offer rejected.
Analysts predicted Allied had an edge as it was bigger and had more geographic overlap with G4S, giving it greater cost savings in a merger. G4S had said Garda was too small to be a global leader and would rely on G4S’s balance sheet to finance the deal.
The Allied bid was ‘fair and reasonable’, G4S said.
Sources claimed the race for the company had ended because Cretier had been unable to raise the necessary financial firepower to increase his bid. He denied the claim saying in a statement that Garda ‘will not overpay’ and that ‘there are better and less risky opportunities available’.
G4S is the latest British business with a bombed-out share price to fall into foreign hands. Bookmaker William Hill and RSA Insurance were also snapped up by overseas rivals at the end of last year.