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G4S Allegedly Courting Allied Universal in Bid to Defend Against Garda’s Hostile $3.8 Billion Takeover Attempt

Horizonstocks

British Security Company Seeks Rival Offers Amid Consolidation in Industry

In a move to solicit rival offers and fend off a hostile bid from GardaWorld, G4S Plc, the British security company, is approaching firms including Allied Universal (AUS) in an attempt to secure a better deal for its shareholders. According to people with knowledge of the matter, AUS has been evaluating whether it should pursue its own bid amid consolidation in the industry.

The $3.8 Billion Hostile Bid from GardaWorld

Garda made a hostile takeover bid for G4S last month after failing to convince its management to come to the negotiating table. The proposal, valued at $3.8 billion, was rejected by G4S on the grounds that it undervalues the company. Garda has been seeking meetings with G4S shareholders to persuade them to accept the proposal.

G4S: A Company with a Global Presence

G4S provides guards to everything from airports to prisons and has a significant presence in the UK, Europe, Asia, Africa, and the Americas. The company’s shares have fallen about 8% in London trading this year, giving it a market value of $3.1 billion. The stock closed at £201.50 pence on Thursday, indicating investors expect to receive an offer higher than Garda’s current proposal of £190 pence.

Potential Interest from Private Equity Firms

G4S may also draw interest from private equity firms, which could potentially allow management to stay in place under a new owner. This scenario would be beneficial for G4S, as it would ensure continuity and avoid the disruption associated with a hostile takeover bid.

Allied Universal: A Potential Suitor?

AUS is a security and facilities manager with over 200,000 staff and $8.5 billion in revenue, according to its website. The company operates across North America, with a presence in the US, Canada, and Mexico, as well as an international base in the UK, where it employs over 700 people.

Mergers and Acquisitions in the Industry

The security industry has seen significant consolidation in recent years, with several companies merging or acquiring others to increase their market share. This trend is likely to continue, making AUS a potential target for G4S or other firms looking to expand their presence in the industry.

Major Shareholders Unconvinced by Garda’s Offer

Major G4S shareholders have so far been unconvinced by Garda’s cash offer. Harris Associates and Sachem Head Capital Management both view the bid as too low, according to Bloomberg News reports.

Conclusion

The battle for control of G4S is likely to continue, with AUS emerging as a potential suitor in the process. The company’s management may be keen to secure a better deal for its shareholders, and private equity firms could provide an alternative option. As the security industry continues to consolidate, it remains to be seen which companies will emerge as leaders in the sector.

G4S at a Glance

  • Market value: $3.1 billion
  • Number of staff: Over 500,000 worldwide
  • Revenue: £14.7 billion (FY2020)
  • International presence: UK, Europe, Asia, Africa, and Americas

Allied Universal at a Glance

  • Number of staff: Over 200,000
  • Revenue: $8.5 billion (FY2020)
  • Presence in: North America, including the US, Canada, and Mexico, as well as an international base in the UK.

Note to editor:

This article is intended for general information purposes only and does not constitute investment advice. The views expressed are those of the author and do not necessarily reflect the opinions of any other individuals or organizations involved in the industry.