British Company G4S For Sale

G4S rejected a £3.3bn bid from US rival Allied Universal last week, turning away a second suitor in the takeover battle for the world’s biggest security company. The British company is publicly fighting a lower £3bn hostile bid from Canada’s GardaWorld. It said it had also rejected a conditional offer from Allied last Wednesday at a price of “at least 210p a share” on the grounds that it was too low.  G4S added that talks were continuing and it was “engaged with Allied and an independent consultant to establish a process through which commercially desensitised information may be provided”.

Its intervention kicks off a three-way contest for G4S, which employs 530,000 staff in 85 countries guarding embassies, sports stadiums and music events, as well as providing justice services such as the management of prisons. Shares in G4S rose 4.9 per cent to 214.60p on Tuesday, giving the company a market value of £3.3bn. Tyler Tebbs, an analyst at Louis Capital, said the Allied bid could “light a fire under Garda’s butt and force them to put their real offer on the table”. “It sounds like Allied is serious and will come back,” he added. Last week G4S recommended that shareholders reject Garda’s bid, which is backed by private equity company BC Partners, calling the offer of 190p a share “wholly inadequate”.

Allied Universal is a security and facilities manager with more than 200,000 staff in the US, Canada, Mexico and the UK. There are concerns that any deal with G4S could raise competition issues in its domestic market. The company is backed by Canadian pension fund Caisse de Dépôt et Placement du Québec, private equity company Warburg Pincus and J Safra Group, a Brazilian bank. Allied was unavailable for comment. GardaWorld, based in Montreal, has 102,000 staff and £2.1bn in revenue. It has been on a dealmaking spree, adding nine businesses in the year to January 2020. If G4S is sold, it would be among the 10 largest UK public companies to be taken private in the past five years, according to Refinitiv data.  Advent International’s £4bn acquisition of Cobham and the $6bn purchase of satellite company Inmarsat by a group led by Apax and Warburg Pincus are among the others.  Robert Plant, an analyst at Panmure Gordon, said: “We see scope for higher offers from both companies and have a 225p target price. “G4S, as the market leader, is a unique asset which should be appealing to potential bidders.”