G4S has rejected a £3bn hostile takeover bid from private-equity backed Gardaworld claiming it “significantly undervalues” the company.
Shares in the security firm surged more than 24 per cent on reports that Gardaworld had offered to pay 190p a share in cash in August.
Gardaworld said it had made three attempts to engage with G4S’s board over the past three months, which had been “summarily dismissed or ignored”. However G4S hit back and said it had considered the proposals and today unanimously rejected the proposal.
“Following careful consideration, together with its financial advisors, the board of G4S unanimously rejected the new proposal on 12 September 2020, on the basis that it significantly undervalues the company and its prospects”, it said in a statement.
Gardaworld is the largest privately owned security services firm in the world, and employs more than 102,000 people globally.
It urged G4S shareholders to ask the board to hold “collaborative discussions” with Gardaworld on a “transaction that would be of clear and immediate benefit to G4S’s shareholders, customers, employees and members of the company’s pension schemes.”
G4S said the timing of the proposal is “highly opportunistic” given the turbulence amid the global financial markets due to the pandemic.
It added: “Shareholders are strongly advised to take absolutely no action in relation to the new proposal.”
Gardaworld boss Stephen Cretier said the security firm “needs an owner not a manager. GardaWorld has 25 years of experience in the sector and we know how to improve and repurpose this business.”
“As owner-operators, we believe that the combined business’s operations will offer a better future for all those who depend on G4S. We will turn G4S around, ensuring it delivers for its customers, its people and the public.”
Private equity firm BC Partners owns a 51 per cent stake in Gardaworld. With Cretier, BC Partners chairman Raymond Svider wrote to G4S’s chairman John Connolly at the end of August.
The deal will reportedly be funded with equity from BC Partners and debt that three banks had already agreed to provide, the letter said.
Like Gardaworld, G4S runs cash handling services and security operations and is also managing the UK’s coronavirus test centres.
It has been embroiled in several scandals over contracts it has had with the government in recent years.
In June the Serious Fraud Office fined the firm £44m as part of a deferred prosecution agreement relating to it overcharging the Ministry of Justice for a contract.