GardaWorld inflates its hostile offer for G4S

(Montreal) GardaWorld is putting more money on the table by increasing its hostile offer by around 24% to acquire the world number one in security G4S, still coveted by an American company that includes the Caisse de dépôt et placement du Québec ( CDPQ) among its main shareholders.

Julien arsenault
The Canadian Press

The Quebec multinational unveiled on Wednesday a “final” proposal, valid until December 16, of 235 pence per share, which gives G4S a value of around 6.3 billion. Its previous offer of 190 pence, valued at nearly 5.2 billion, had been rejected by the board of directors of G4S and had failed to rally investors.

For GardaWorld founder, president and CEO Stéphan Crétier, the shareholders of the London-based company have a decision to make: keep their investment in a company that has been unable to deliver the goods for the past few years or accept a sum of money that comes with a tempting bonus.

“G4S has been consistently weakened by a management team that has destroyed the equivalent of a billion pounds sterling of value over the past seven years, squandered hundreds of millions of dollars on restructuring programs that have not had effects on margins, ”he said in a statement.

The UK company will look into GardaWorld’s new offering, but at the same time it continues to trade with Allied Universal Services, which is around 35% owned by CDPQ – an investment that has been criticized repeatedly by Mr Crétier over the years. last weeks.

Allied, which had also seen its highly conditional offer, valued at 5.7 billion, be rejected by G4S, has until December 9 to return to the charge. Allied did not respond, Wednesday morning, to a request for information from The Canadian Press sent by email.

A starting point ?

On the London Stock Exchange, the title of G4S jumped 7.42% on Wednesday to close at 246 pence – above the price offered by GardaWorld, which suggests that investors expect an overbid. This is the scenario on which analyst Tyler Tebbs, based in London for the firm Louis Capital, is banking. In a telephone interview, he mentioned a price of 250 pence per share.

“It’s a realistic starting point,” Tebbs said of GardaWorld’s new proposal. The real auctions can now begin. We’ll see what Allied does. The company is in talks with G4S so we can expect an offer. ”

The exchanges have escalated between the CDPQ and Mr. Crétier, who believes that the woolen socks of Quebecers are putting a stick in their wheels by being alongside a company that is trying to beat it down. In a recent interview with Radio-Canada, the businessman expressed fears for his company if he loses the fight for G4S, while the security sector is in full consolidation.

For its part, the Caisse refuted the criticisms of the boss of GardaWorld by affirming that it was ready to support him financially as part of its hostile offer for G4S and that it was Mr. Crétier who preferred to turn, to the last minute, towards a financing proposed by a banking syndicate as well as a proposal of the American investment company HPS Investment Partners.

GardaWorld explained that its new offering for G4S features a support plan of around $ 1.3 billion to address what have been touted as “issues” surrounding the UK company’s pension plan. The new proposal now only requires the approval of a simple majority of G4S security holders, instead of 90% previously.

Founded more than 25 years ago, GardaWorld employs over 102,000 people in North America, Africa, Asia and the Middle East. For its part, G4S is present in 85 countries, including Canada, and has more than 533,000 employees.