The FTSE 250 firm said it “significantly undervalues” its prospects so the board unanimously said no.
“The board believes that the timing of the proposal is highly opportunistic, coming as it does at a time of severe turbulence in global financial markets,” G4S said on Monday afternoon, adding its financial performance during the pandemic has been “particularly resilient”.
The privately-owned company, which claims to be the world’s largest in the security services space, said it has made three attempts to engage with the board of G4S over the last three months.
In its most recent offer letter on August 31, GardaWorld valued each G4S share at 190p, representing a premium of 86% to the share price on the business day prior to GardaWorld’s first approach to G4S’s board, which was on June 15.
It is also a 30% premium on Friday’s closing price.
GardaWorld said its attempts to engage with G4S’s board have been “summarily dismissed or ignored on three occasions” and so the Canadian company was now making the possible offer public to get the UK company’s shareholders on its side.
“G4S needs an owner, not a manager. GardaWorld has 25 years of experience in the sector and we know how to improve and repurpose this business,” said Stephan Crétier, founder, chairman, president and chief executive of GardaWorld.
“We will turn G4S around, ensuring it delivers for its customers, its people and the public.”
Neil Wilson, an analyst at Markets.com, said this time the offer “looks more serious” after chatter about it last spring.
“Since the pandemic G4S’s valuation has made it more appealing, whilst revenues of about ~£7bn annually remain far ahead of GW. This will be the tiddler swallowing the whale,” he noted.
“I think this is just the start of an autumn of deals… I think we will see many more bids of this nature – foreign private money snapping up cheap, undervalued UK equities.”
Shares in G4S shot up 24% to 181.65p on Monday at noon and remained muted in the afternoon following G4S’s announcement.
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