G4S investors vent ire after ISS deal scrapped

INVESTORS in security firm G4S started to call for the chairman’s scalp yesterday after the company abandoned its takeover of Danish cleaning group ISS at the eleventh hour.

Shareholders welcomed the decision to abort the unpopular £5.2bn merger, but called for chairman Alf Duch-Pedersen to resign over his handling of the deal.

G4S pulled the deal just 48 hours before facing shareholders at a crunch vote. It would have received all proxy votes, and it is believed the result was so grim it decided to abandon the effort. G4S has not released any vote results. City A.M. understands that Schroders and Artemis were among those that voted against the deal, while Co-op Asset Management and hedge fund Parvus publicly opposed it.

Parvus’ founder and portfolio manager Edoardo Mercadante, who spearheaded opposition, said Duch-Pedersen’s position was “untenable”.

“I didn’t speak to a single shareholder who didn't share our views,” he said. “I am very surprised that the chairman has not stepped down yet.”

Others said G4S would need to reassure investors on strategy.

“Shareholders will need to regain confidence that [chief executive Nick] Buckles himself doesn’t think the existing strategy has run its course. Our engagement will focus on the acquisition sign-off process on the board,” one investor told City A.M.

G4S shares closed 0.4 per cent up.