Canada’s GardaWorld adviser pursuing a £ 3bn deal to buy British rival G4S can up to 312 million if it succeeds in gaining shareholder support for a hostile takeover. We are in a position to pay a pound fee.
Prices are set out in an offer document released by GardaWorld on Saturday, and the Canadian group is per share of G4S given the level of investment needed to address long-standing financial and reputational issues. Claimed that the 190p offer was justified.
GardaWorld is in a position to earn £ 100 million in documents for bankers such as Barclays, UBS, Bank of America and Jeffreys to provide financial advice and intermediary services when a deal is closed. Said. An additional £ 180m will be paid to the bank that provides the funding arrangements used to pay for the transaction.
One of London’s senior bankers not involved in the transaction said financial advisory fees were unusually high, highlighting a series of similar private equity support transactions in the UK market, where banks’ profits are much lower.
For legal affairs, attorneys in transactions led by Simpson Thatcher could earn up to £ 18m, and public relations advisors, including Montfort Communications in London, could earn up to £ 7m.
Favorable fees at stake underscore the importance of trading to advisers in the London market, where merger and acquisition activity is sluggish this year.
The offer limits weeks of intense criticism from a small Canadian company in which private equity firm BC Partners holds a 51% stake.
In this document, GardaWorld accuses British companies of having “unfounded optimism” about their outlook and promises to make a radical “cultural change” if they take control. Did.
“Simply put, the cookie cutter approach cannot modify the operation of G4S,” said Stephan Cretier, GardaWorld’s CEO. “This operation requires deep reprogramming of roots and branches.”
The G4S, best known for running prisons and providing security guards, is fighting to support investors after rejecting a 190p bid from GardaWorld last month.
Its largest investor, Schroders, says it is open to acquisitions at higher prices. The latest document is a formal offer, but don’t prevent GardaWorld from increasing bids if it chooses to do so.
G4S states: “There’s nothing new here. The terms of the offer are the same as those included in the GardaWorld announcement on September 30. This announcement significantly underestimates the company and its outlook. The board unanimously refused because it was not in the best interests of shareholders and other stakeholders. “
G4S’s annual revenues exceed £ 7 billion and employ more than 500,000 people in 80 countries, but have been hit by a series of scandals, including the loss of the UK government’s contract to operate Birmingham Prison last year. ..
GardaWorld is a much smaller business, with annual sales of around £ 2 billion and 100,000 employees, but claims that G4S is losing market share.
We believe 190p is a reasonable price for G4S’s £ 300m pension deficit and potential future debt from legal action taken against the company.
G4S said last week it attracted attention from its rival acquisition company, Allied Universal, one of the largest operators in the United States, the world’s largest security market. No formal offer has been received yet, and the Allies declined to comment.
Additional report by Kaye Wiggins