The takeover battle for security outsourcer G4S ended yesterday (22 February) when GardaWorld withdrew from a public auction after an eight-month contest with US firm Allied Universal Security Services.
The UK’s Takeover Panel had ordered a five-day public auction to settle an impasse in the protracted tussle because Canadian firm GardaWorld, with a 235p-a-share offer, and Allied Universal offering 245p, had not increased bids since December. But soon after the auction opened yesterday morning, GardaWorld pulled out of the bidding, leaving the US firm’s £3.8 billion offer on the table.
A key UK government outsourcer, G4S currently runs services in four British prisons and manages 21 UK Covid-19 test centres. It has seen its fortunes rally as the bidding war between the North American firms intensified.
Allied Universal and G4S said the combined company would create a “world-leading integrated security business with revenues of approximately $18 billion”. Allied’s acquisition creates an even larger private security firm with at least 750,000 people employed worldwide as the firm expands outside North America.
Stephan Crétier, CEO of GardaWorld. said: “There can be no better owner for G4S than GardaWorld, but we are disciplined buyers and we will not overpay for a company with systemic ESG issues that continue to come to light.
“GardaWorld has the skills, expertise and ambition to take on the challenges that G4S faces. We understand the people-oriented nature of our industry, we have a deep understanding of complex operating environments and a successful track record of profitably growing businesses.
“But a successful integration of G4S, a 530,000-employee platform operating in 85 countries will require sizeable resources; addressing its issues will require greater investment and without satisfactory engagement from G4S we have been unable to complete our due diligence.
“In light of the above, we have concluded that priced above 235 pence per share, there are better and less risky opportunities available to GardaWorld. We will continue to capture such opportunities as we actively pursue our growth as a value-added partner of choice in the security and specialised services space.”
John Connolly, chairman of G4S’s board, said: “Throughout this process, the G4S board has prioritised the interests of the company’s stakeholders. By successfully establishing a competitive process and providing offerors with equal access to extensive due diligence information, the board has been able to maximise shareholder value and put in place important protections for employees.
“Allied Universal’s final offer of 245p per share reflects the transformation of G4S under Ashley Almanza and his leadership team, supported by the impressive efforts of all G4S employees. The business has been fundamentally refocused and repositioned as a global leader to address long-term growth in security markets, with a unique market footprint and industry-leading expertise.
“We are therefore unanimously recommending it to our shareholders.”
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