Canada’s GardaWorld Security has increased its takeover offer for outsourcing giant G4S to £3.68 billion as it ramps up its hostile pursuit.
GardaWorld said it will now pay 235p a share for G4S under its final cash offer – up 24% from its previous 190p-a-share bid, which valued G4S at £3 billion.
It has also reached a deal with G4S pensions trustees on a £770 million funding package for the retirement scheme.
G4S had rejected GardaWorld’s 190p-a-share offer, which was first made in September, claiming it undervalued the business and was “highly opportunistic”.
Shareholders have a simple choice: remain invested in a company which has consistently failed them and the wider community for so many years, or realise their investment in cash, at a significant and highly attractive premiumStephan Cretier, GardaWorld Security
But GardaWorld said it has now slashed the level of shareholder acceptances required for the deal from 90% to a simple majority of 50% plus one share, “significantly increasing deal certainty”, according to the firm.
It revealed it has received valid acceptances from shareholders owning around 0.17% of G4S, as at November 28.
G4S said it is looking at the higher bid with its financial and legal advisers, and urged shareholders to “take absolutely no action” at this time.
It added that it also remains in talks with another suitor, rival Allied Universal, after it rejected a £3.25 billion approach from the firm last month.
Allied must make a formal offer by December 9 if it plans to do so.
Shares in G4S jumped another 8% to 246p on Wednesday morning.
GardaWorld boss and founder Stephan Cretier said: “Shareholders have a simple choice: remain invested in a company which has consistently failed them and the wider community for so many years, or realise their investment in cash, at a significant and highly attractive premium.
“Despite the excuses, claims, promises and ‘aspirational targets’ advanced during the course of the bid defence, the stark fact is that G4S is ex-growth and faces serious challenges.”
He added: “G4S needs an owner-operator that understands the people-orientated nature of the sector with the resources, time and expertise to solve the many challenges faced by the business.”
G4S shareholders now have until December 16 to decide if they want to accept its final higher offer.
Read our second response document published today in relation to the unsolicited offer made by GardaWorld. https://t.co/8Eajdvqd09— G4S (@G4S) November 25, 2020
Bosses at G4S said last month that they will start paying a dividend again and painted a bright future for the company, claiming it can reach revenue growth of between 4% and 6% a year if it remains independent.
But the firm reported a hefty £91 million loss for 2019 after it was forced to write down the value of its cash handling business.
It has also announced plan to cut more than 1,000 jobs, largely at its cash solutions arm, as part of an overhaul to slash costs.
Michael Hewson, chief market analyst at CMC Markets, said: “G4S has been a business that has seen its fair share of problems over the past three years, its share price down sharply from the record highs seen back in July 2017.”
He added: “G4S management have been pushing back for some time against GardaWorld; however, with Allied Universal Security also lurking in the background, G4S shareholders are likely to find this new offer compelling, especially since the shares are up over 50% since the initial September bid.”