G4S suitor ups ante on £2.7bn pension deficit

Oct 4, 2020

Canadian predator targeting G4S putting outsourcer’s pension deficit at heart of its fight to seize control

  • GardaWorld has made a formal £3billion hostile takeover bid
  • A source close to the bid said GardaWorld will ‘throw light on the awful performance of G4S

The Canadian predator targeting G4S will put the outsourcer’s pension deficit at the heart of its fight to seize control. 

Last week security firm GardaWorld, backed by the private equity company BC Capital, made a formal £3billion hostile takeover bid, saying G4S needed fresh management to deal with ‘scandals, crises and lawsuits’. 

The suitor’s boss Stephen Cretier then riled the British security firm’s shareholders by claiming they needed ‘educating’ about the true state of the company. 

Under scrutiny: GardaWorld will now step up its charm offensive to win over G4S's major shareholders

Under scrutiny: GardaWorld will now step up its charm offensive to win over G4S’s major shareholders

GardaWorld will now step up its charm offensive to win over G4S’s major shareholders. This week it will try to put the focus back on G4S and its management. 

A source close to the bid said GardaWorld will ‘throw light on the awful performance of G4S, not just financially but in the real world’, adding that the company was ‘concealing nasties’ from shareholders. 

‘A big item is pensions, but there is a long list of other things,’ the source added. 

‘Security service outsourcing is a vital and potentially growing sector that has lost the confidence of politicians and public – in large part because of the antics of G4S.’ 

G4S has been at the heart of several controversies, including its failure to deliver the security contract for the London Olympics. 

Last month GardaWorld claimed it was being obstructed in its attempt to outline proposals to deal with G4S’s £2.7billion pension deficit, adding the scheme had been ‘persistently underfunded’. The £3billion bid has been repeatedly rejected by G4S’s management in recent months, and many shareholders are holding out for a bid of well over the firm’s current 204p-per-share price. 

Around a quarter of shareholders have publicly opposed the offer. Fund manager Schroders, the biggest shareholder in G4S with a 10.4 per cent stake, has already said it is open to a deal but only at a ‘fair price’. 

In comments published yesterday, Connolly, 70, said: ‘[GardaWorld] have clearly decided that the shareholders don’t properly understand either our company, or their office assume that they will educate them, [but] I have no idea what that will be. 

‘I always think you’ve got to be careful not to be extremely negative about the business that you’re saying you want to acquire.’

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