G4S slams ‘desperate’ Gardaworld takeover bid
The chairman of G4S has said that rival firm Gardaworld, which is trying to engineer a takeover of the FTSE 250 group, “desperately needs” the bigger company to “realise its ambitions”.
In a letter released to the market this morning, John Connolly called for shareholders to reject a 190p per share offer for the G4S, which he said “significantly undervalues” the firm.
He wrote: “Gardaworld and BC Partners desperately need access to G4S’s balance sheet and strong cash flows in order to finance this acquisition, and their acquisition-fuelled growth strategy.
“Meeting their needs should not be at the expense of our shareholders and key stakeholders.
“Gardaworld has quite simply failed to articulate why your company’s employees and stakeholders should support an acquisition that would be over ten times the size of Gardaworld’s largest acquisition to date”, Connolly added.
Gardaworld’s relentless pursuit of G4S has seen it have two offers rejected already. In June, it first bid at 145p per share and then followed up with an improved 153p per share offer.
It came back with a 190p offer in September, which G4S’s board again “unanimously rejected”.
The takeover bid has at times dissolved into a slanging match, with both sides questioning each other’s track records in a bid to woo shareholders.
Earlier this month Gardaworld released a document claiming that there were “serious issues” with G4S pensions schemes.
“We said we would help shareholders ‘look under the hood’ and that is exactly what we will continue to do”, a spokesperson for the company said.
G4S hit back, saying that the statements were “misleading”.
This morning Connolly also revealed that the company had raised its medium-term financial targets in a show of confidence.
It is now targeting four to six per cent revenue growth per year, and a profit margin of seven per cent.
In response, Gardaworld’s founder and chief executive, Stephan Crétier said: “The idea that a management team which 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.”