G4S Rejects Takeover Proposal From Allied Universal

G4S Plc said it recently rejected a takeover proposal from U.S. competitor Allied Universal Security Services LLC, with the British guarding company now at the center of a potential tussle between two suitors.

Allied Universal on Oct. 28 tabled a “highly conditional indicative offer” of at least 210 pence per share, subject to due diligence, G4S said in a statement Tuesday. The board rejected the proposal on the grounds it “significantly undervalues G4S and its prospects,” it added, confirming an earlier Bloomberg News report.

Shares of G4S gained 4.5% to 213.70 pence at 11:42 a.m. in London, giving the company a market value of 3.3 billion pounds ($4.3 billion).

The move marks the second suitor to be turned away by the British firm, which is publicly fighting a hostile bid from Canada’s GardaWorld. G4S Chief Executive Officer Ashley Almanza said in an interview last week that the company hasn’t seen any mergers that make sense and will push ahead with a turnaround plan.

G4S recommended last week that shareholders reject Garda’s bid, which is backed by private equity firm BC Partners, calling the offer of 190 pence per share “wholly inadequate.”

“We have not seen a potential combination yet that may have been in the best interest of shareholders,” Almanza said in the interview, without naming any other suitors. “The board believes in our strategy.”

Bloomberg News reported last month that G4S was approaching firms including Allied Universal in an attempt to solicit rival offers to Garda.

Allied Universal is a security and facilities manager with more than 200,000 staff and $8.5 billion in revenue, according to its website. The biggest shareholders include Canadian pension fund Caisse de Depot et Placement du Quebec and buyout firm Warburg Pincus.

Garda, in a statement on Tuesday, sought to cast doubt over Allied Universal’s credentials, and criticized G4S management’s handling of the situation. Such a tie-up would face “insuperable” antitrust issues, it said, adding that Garda’s offer has been made public, unlike its rival’s.

The Canadian suitor also stressed that if G4S gives others access to any information -- like due diligence -- it is entitled to the same material under U.K. takeover law.

“The G4S board -- instead of shadowboxing -- should without delay engage with us,” Garda said in an emailed statement. “Our financing is real, our offer is a matter of public record and our intent is serious.”

©2020 Bloomberg L.P.

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