Allied Universal wins G4S auction with $5.3 billion bid, beating GardaWorld

(Reuters) – Allied Universal made the highest bid in an auction for Britain’s G4S, defeating a sweetened final bid from Canada’s GardaWorld after a months-long battle for the security specialist.

FILE PHOTO: A G4S security van is seen parked outside a bank in Loughborough, central England, August 28, 2013. REUTERS/Darren Staples/File Photo

G4S’ shares, which have surged more than 80% since GardaWorld first made its offer public in mid-September, dropped nearly 10% to 242.5 pence and were set for their worst day in a year.

A regulatory panel said the auction, called to conclude months of unsuccessful efforts by either side to win over shareholders, had concluded with Allied bidding 245 pence per share compared with Gardaworld’s 235 pence.

Garda said in a statement ahead of the auction result that it would bid no higher, suggesting it had gone as far as it could in the process.

“We are disciplined buyers and we will not overpay,” GardaWorld Chief Executive Officer Stephan Crétier said. “There are better and less risky opportunities available to GardaWorld.”

The UK company’s management had already agreed to the 245-pence-per-share offer from Allied, which valued it at 3.8 billion pounds ($5.31 billion), but shareholders have held off approving numerous extensions of both offers in the hope of a better deal.

G4S, which employs more than half a million people in 90 countries, did not immediately respond to a Reuters request for comment, while Allied was not available to respond outside of business hours.

Britain’s takeover regulator had stepped in to help resolve the battle by giving the North American bidders until Feb. 20 to make their final offers or go head-to-head in an auction starting Monday.

The decision to go with an auction is rare, with only a handful of bidding wars taking that route in the past. In 2018, Comcast beat Rupert Murdoch’s Twenty-First Century Fox in a bespoke-style auction for pay-television group Sky that lasted only a day.

The auction procedure can last up to five days but is concluded when bidders say they have reached the final price they will be willing to pay for the target firm.

Both GardaWorld and Allied Universal are trying to buy a larger business, which has had to restructure over the past few years following a series of setbacks. Last year, G4S sold its cash handling unit, barring a few operations including the one in the UK, to U.S. peer Brinks Co.

The British security contractor employs security guards in offices, government agencies and financial institutions and provides security camera installations and metal scanners in airports.

($1 = 0.7150 pounds)

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