The battle between G4S and its hostile bidder GardaWorld heated up again today as the scandal-hit British security giant rejected its suitor’s claims as ‘misleading’.
GardaWorld – the Canadian rival that last month made a formal £3billion hostile takeover bid – had questioned if G4S had enough cash to pay for litigation that was ‘potentially crippling’.
It had also claimed that, on top of being subject to five legal cases, G4S had serious pension funding issues.
Takeover battle: G4S reiterated once again that GardaWorld’s offer of 190 pence per share ‘significantly’ undervalued the company and its prospects
But G4S today said its rival’s ‘focus on legacy issues, which are now substantially resolved, and its misleading statements’ were designed to support ‘its opportunistic and clearly inadequate offer’.
It said they only served the interests of GardaWorld and its private equity backer, BC Partners, rather than the interests of G4S’s ‘shareholders, customers, employees and pension fund members’.
It also insisted its pension schemes are ‘well funded’ and that it has a plan for addressing the deficit with trustees. G4S’s pension scheme has assets of £2.4billion and a funding gap of £300million, according to the group.
And it reiterated once again that GardaWorld’s offer of 190 pence per share ‘significantly’ undervalued the company and its prospects.
Around a quarter of shareholders have publicly opposed the offer. Fund manager Schroders, the biggest shareholder in G4S with a 10.4 per cent stake, has already said it is open to a deal but only at a ‘fair price’.
Last week Garda was also criticised for telling investors they needed ‘educating’ about G4S.
G4S said today: ‘The board, once again, unanimously rejected this offer as it continues to significantly undervalue the company.
‘GardaWorld clearly needs a transformative acquisition in order to realise its aspiration to be a global company and this is simply not reflected in its offer of 190 pence per share.’
G4S accused GardaWorld of being a loss-making company, claiming it has reported net losses of around 940million Canadian dollars (£547million) in the past three years.
G4S provides security at NHS Nightingale hospitals and handles coronavirus testing sites across the UK
The latest shots fired in the tussle come after G4S announced yesterday it had won a ten-year contract to run Five Wells prison in Wellingborough, Northamptonshire, which it said shows it had won back the Government’s trust.
The deal to run the 1,680 category C prison will bring in £300million over the lifetime of the contract.
G4S, which provides security at NHS Nightingale hospitals and handles coronavirus testing sites across the UK, has been at the heart of several controversies over the years.
It failed to deliver the security contract for the London Olympics, leading to the British Army being brought in. Last year, it was also stripped of its contract for running Birmingham Prison seven years early.
Shares have bounced back above 200p since the takeover battle emerged, but they were trading at around 330p in June 2017 – meaning many investors are still nursing heavy paper losses.
Shares were flat at 201.80p at around midday.