National Post (Latest Edition)
U.K. security G4S rejects US$3.81 billion hostile bid from Canadian rival Gardaworld.
Security firm has called overtures ‘opportunistic’
Security group G4S on Wednesday rejected a cash offer by smaller Canadian rival Gardaworld that valued the British company at 2.97 billion pounds ( US$ 3.81 billion), weeks after it turned down a similar proposal.
G4S, one of the world’s largest private security companies, had rejected Gardaworld’s sweetened US$2.44 per share proposal earlier in September, calling it “highly opportunistic.”
It also rejected two prior proposals in June for US$ 1.86 per share and US$1.96 per share each.
G4S said: “Shareholders are strongly advised to take absolutely no action in relation to the unattractive and opportunistic offer.”
Shares in London- listed G4S jumped 5.9 per cent to close at US$ 2.57, above the US$2.44 offer made by Gardaworld’s subsidiary Fleming Capital Securities.
Since Gardaworld made its offer for G4S public on Sept. 14, G4S shares are up 30 per cent.
“G4S is a deeply troubled business which needs a committed owner- operator team that understands the sector and has a definitive and comprehensive plan,” Garda chief executive Stephan Cretier said in a statement on Wednesday. “Stakeholders can take no confidence in the promises of a senior management team that has been in place for seven years and has not delivered.”
“The G4S Board has behaved in a cavalier way by rejecting our potential offer out of hand,” Cretier said, adding “we look forward to meeting with investors to explain the challenges ahead and why this is a full and fair price.”
The firm offer is at the same level as earlier proposals, which G4S shareholder Harris Associates has said were too low.
New York- based Sachem Head Capital Management also values the British firm at more than US$ 2.44 a share, people familiar with the matter said earlier this month, though the investor would consider backing a sale at a higher price, they said.
A combination of Garda and G4S would create a global security firm with more than 600,000 employees — with about half a million coming from the latter company.
The two firms provide guards to everything from airports to prisons and have operations around the world.
Gardaworld’s interest in G4S was made known last year, when it considered a cash offer for some or all of G4S, but by May had opted not pursue a deal.
Over the past year G4S has had to overcome a series of setbacks, including the loss of a contract to run a Birmingham prison, and a decision by Norway’s wealth fund not to invest in the company.
It sold off most of its cash- handling business in February to U. S. peer Brinks Co.