Allied Universal is buying the largest private security firm in the world G4S (LSE: GFS), following a months-long takeover battle against its Canadian rival GardaWorld.
Fundamental analysis: Allied wins auction
The auction ended with Allied’s bid of 245 pence per share, versus Gardaworld’s 235p. Allied’s bid valued G4S at 3.8 billion pounds ($5.3 billion). The British company reported a net debt of 1.56 billion pounds as of mid-2020.
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The takeover will help expand Allied to a massive private security firm with over 750,000 employees around the world. After the results, GardaWorld said it does not plan to make further counteroffers.
The Pennsylvania-based company said in the offer document last year that it is considering abandoning the prison business and some markets including Iraq, Afghanistan, Sudan, and Uganda.
Furthermore, the company’s dealings in Qatar and the United Arab Emirates have been under investigation, while Norway’s wealth fund said it will make no further investments because of the “unacceptable risk”.
“We are disciplined buyers and we will not overpay for a company with systemic ESG issues that continue to come to light,” president and chief executive officer of GardaWorld Stephan Cretier said.
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Technical analysis: GFS settles down
Shares of G4S fell nearly 10% yesterday to trade around 243p. GFS stock price initially traded about 80% higher since GardaWorld placed its bid in September. Last week, the price action set a new record high of 270.9p.
Summary
Allied Universal is taking over the British security giant G4S after winning the months-long battle against GardaWorld. Shares of the company plunged about 10% to settle near the agreed price of 245p.
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