Monday 30 November 2020 9:32 am

G4S board calls for no shareholder action as Gardaworld extends offer until 16 December

Gardaworld has pushed back the deadline for its 190p per share offer to buy outsourcer G4S by a month, it confirmed this morning.

Shareholders in the FTSE 250 company will now have until 16 December to accept the offer, which was first made on 17 October.

Responding to the announcement, G4S released a statement reiterating that its board had previously rejected this “wholly inadequate offer.”

“The simple fact is that, after three months of the same messages, GardaWorld has received only 0.17% acceptances, reflecting the derisory level of its offer. The board of G4S urges shareholders to take no action in relation to the GardaWorld offer,” according to the statement.

Extension

The extension comes after a sometimes rancorous exchange of blows between the two firms, with both companies seeking to pour doubt on the other’s aspirations.

Gardaworld has been in pursuit of G4S for months, and has already seen several offers for the security specialists rejected.

Commenting on today’s extension, the Canadian firm’s chief executive Stephen Cretier, said that Gardaworld could make G4S “world class” again.

“Throughout this process we have not seen a single piece of evidence to suggest that our offer of 190p in cash is anything other than full and fair. Aspirational targets and non-binding promises on dividends do not, in our view, equate to a sound business valuation”, he added.

Before the Open newsletter: Start your day with the City View podcast and key market data

“Gardaworld and BC Partners (which took over Gardaworld in 2019) are disciplined buyers who will not be susceptible to post-pandemic market euphoria. Covid-19 was not the cause of the slump in performance at G4S and neither will its hoped-for abatement be the trigger for improved business performance.

“The stark truth is that the existence of our bid has been the primary driver of G4S’s share price since our approach to the Board, when it was 102p.”

Last week G4S chairman John Connolly advised shareholders to reject Gardaworld’s “wholly inadequate” offer.

His words came as the firm said that it would resume dividend payments in 2021 after a better than expected performance over the last nine months.

In a letter to shareholders, Connolly wrote: “We believe that Gardaworld and BC Partners have a clear understanding of the strengths of G4S and recognise that G4S is well positioned to generate substantial free cash flow for you, our shareholders. 

“Gardaworld is seeking to use G4S’s strong balance sheet and healthy cash flows to finance their purchase of your company. Furthermore they are capitalising on the impact of Covid-19 on UK equities to make an opportunistic and wholly inadequate offer.”

Share
Tags: