Security outsourcing firm G4S looks set to be taken over by Allied Universal Security Services, after rival Canadian suitor GardaWorld said it would not be increasing its existing bid to trump the US firm’s £3.8bn offer.
G4S, which operates services including running four British prisons and managing 21 UK Covid-19 test centres, saw its stock jump as the long-running bidding war between GardaWorld and Allied Universal intensified.
However, on Monday GardaWorld said that it would not be increasing its 235p-a-share offer, which valued G4S at £3.68bn (£2.61bn), bringing to an end the auction process called by the UK Takeover Panel.
The company said that while it believes there is “no better” owner for G4S, it would not overpay for a company facing environmental, social and governance scandals.
“We are disciplined buyers and we will not overpay for a company with systemic [environmental, social and governance] issues that continue to come to light,” said Stéphan Crétier, founder and chairman of GardaWorld. “There are better and less risky opportunities available to GardaWorld.”
G4S has faced heavy criticism after being stripped of several government contracts, including running HMP Birmingham, but most of its work is in the corporate sector. G4S runs cash-handling services and provides security operations for clients including the new Hinckley Point C nuclear power station.
GardaWorld’s final offer falls short of American rival Allied Universal’s 245p-a-share bid lodged in December, which the board of G4S recommended shareholders vote to accept.
G4S employs 533,000 staff across 85 countries, with its biggest business in North America. The directors of Allied Universal and G4S said the combined company would create a “world-leading integrated security business with revenues of approximately $18bn [£12.8bn at today’s conversion rate]”.
The company’s share price closed down nearly 10% at 243p, just below the level of Allied Universal’s offer per share.