Security group G4S pushes shareholders to accept Allied offer
In 2020, G4S sold most of its cash-handling business to rival Brinks, but held on to the UK operations with attached pension obligations
Bengaluru — UK private security group G4S on Tuesday urged shareholders to accept Allied Universal’s £3.8bn final offer after the end of the US bidder’s drawn-out takeover battle with Canada’s GardaWorld.
Hostile bidder GardaWorld had called a halt to the contest on Monday by telling the UK’s takeover panel it would not increase its December bid of 235p per share for the world’s largest private security company.
Allied said on Tuesday it would not increase the 245p per share offer it announced on December 8, making it the final bid.
G4S had backed that offer in 2020 after repeatedly rejecting GardaWorld’s hostile advances, but low shareholder acceptance forced repeated extensions to offer deadlines.
“G4S directors unanimously recommend that G4S shareholders accept the final Allied Universal offer," The London-listed company said.
Allied on Tuesday extended its offer deadline to March 16 and the acceptance condition was lowered to 75% from 90% in nominal value and voting rights.
It has largely obtained the required antitrust regulatory approvals in the US and EU, Allied Universal added. The deal does not require approval from Britain since the EU clearance was obtained before the Brexit deadline.
“The biggest issue now is probably the pension deficit in the UK, which has constricted M&A deals in the recent past involving G4S UK businesses,” said Morningstar analyst Michael Field.
In 2020, G4S sold most of its cash-handling business to rival Brinks Co, but held on to the UK operations with attached pension obligations.
In its offer document, Allied said it planned to evaluate the possibility of exiting the prison business, where G4S has faced problems in the past, and some other markets, such as Iraq, Afghanistan, Sudan and Uganda.
“Allied will have to work with the pension trustees to come to an arrangement if it wishes to divest anything here [in the UK],” Field added.
Shares in G4S traded flat at 242p 8.55am GMT.
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