G4S said to court Allied Universal in attempt to fend off Garda's $3.8 billion hostile bid

Allied Universal, a U.S.-based competitor to G4S, has been evaluating whether it should pursue its own bid amid consolidation in the industry

G4S Plc, the British security company, is approaching firms including Allied Universal in an attempt to solicit rival offers and fend off a 3 billion-pound (US$3.8 billion) hostile bid from GardaWorld, people with knowledge of the matter said.

Allied Universal, a U.S.-based competitor to G4S, has been evaluating whether it should pursue its own bid amid consolidation in the industry, the people said, asking not to be identified because the information is private. G4S may also draw interest from private equity firms, which could potentially allow management to stay in place under a new owner, the people said.

Garda made a hostile takeover bid for G4S last month after failing to convince its management to come to the negotiating table. It’s been seeking meetings with G4S shareholders to persuade them to accept the proposal, which G4S has rejected on the grounds that it undervalues the company.

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G4S provides guards to everything from airports to prisons. The company’s shares have fallen about 8 per cent in London trading this year, giving it a market value of 3.1 billion pounds. The stock closed at 201.50 pence on Thursday, indicating investors expect to receive an offer higher than Garda’s current proposal of 190 pence.

There’s no certainty any fresh bids will emerge for G4S as the company and its advisers gauge potential interest, and the British firm may opt to remain publicly listed, the people said. A representative for G4S declined to comment, while a spokesperson for Allied Universal couldn’t immediately be reached for comment.

Allied Universal is a security and facilities manager with more than 200,000 staff and US$8.5 billion in revenue, according to its website. It operates across North America, with a presence in the U.S., Canada and Mexico. It also has an international base in the U.K., where it employs more than 700 people.

The company was created in 2016 through a merger of AlliedBarton Security Services and Universal Services of America. Last year, Canadian pension fund Caisse de Depot et Placement du Quebec bought about 40 per cent of Allied Universal in a deal valuing the business at more than US$7 billion. Warburg Pincus and J. Safra Group also acquired a stake in the company later in the year.

Major G4S shareholders have so far been unconvinced by Garda’s cash offer. Harris Associates and Sachem Head Capital Management both view the bid as too low, Bloomberg News has reported.

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