G4S rejects offer from BC's Gardaworld

Greg Gille
30 October 2020

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Listed British integrated security company G4S has urged its shareholders to reject the unsolicited offer made by Gardaworld, a Canada-based integrated security and risk company backed by BC Partners.

G4S published a response document on 29 October stating that the board of directors rejected the "wholly unattractive and opportunistic" offer unanimously.

"The timing of the offer is highly opportunistic and significantly undervalues your business; and Gardaworld and BC Partners desperately need G4S and are seeking to address Gardaworld's weaknesses at your expense," the company told its shareholders in the response document.

On 30 September, Gardaworld and BC Partners made an unsolicited offer for G4S at 190 pence per share. G4S shares were trading at 204 pence apiece at the time of writing.

BC Partners acquired Rhône Group's equity interest in Gardaworld via its BCEC X fund in 2019. The company is headquartered in Montreal.

"BC Partners paid a multiple of 11.2x EBITDA for its acquisition of Gardaworld in 2019," the G4S statement read. "The offer for G4S is very significantly below this value at 7.7x EBITDA, despite G4S being a far superior business."

In a presentation entitled "Achieving the best outcome for G4S shareholders" published on 6 October, Gardaworld highlighted that its offer represented a premium of 86% to the closing share price of 102p on 12 June 2020, being the last trading day prior to its first approach. It also said that "historically senior management has failed to deliver, returning -24% to shareholders over the last seven years" and that "G4S conveniently [used] Covid-19 as an escape route to dilute underwhelming cash solutions divestiture and results"

In response to G4S's defence document, Gardaworld founder and CEO Stephan Crétier said in a statement: "The idea that a management team that has failed to deliver for the last seven years is now asking shareholders to wait another five years for 'Vision 2025' defies rational analysis. The empty promises and, in G4S's own words, 'aspirational targets' show that this management team has lost track of reality."

BC Partners is a minority shareholder in Acuris, the publisher of Unquote.