Shares of British security company G4S (LON:GFS) will be in line with the revised revenue bids held in a competitive takeover battle between Garda World Security Corporation (TSE:GW) and Allied Universal Services LLC. It recovered on Tuesday.
The G4S said it was careful of recent announcements made by Garda. It stated that it had made a 235p offer in cash, 235p per share, 235p per share, in order to acquire the entire issued and issued share capital of G4S. Speaking about the news, the company said the board was in the process of assessing offers along with legal and financial advisors, and told shareholders “never take action” in relation to the offer.
The revised proposal has the G4 fixed at a £3.7 billion valuation, with Garda having to just over 50% of its shareholders to agree that the transaction will move on. Garda also agreed to a £770 million support package in the G4S pension trust. This was considered a critical issue with the purchase income bill.
The G4S statement added: Company offers from Allied Universal must be announced by December 9, 2020. There is no certainty that the Universal Company of the Alliance will make or the conditions under which such an offer may be made. ”
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The group said further updates will be made in the future. Following the news, G4S stocks have grown by 8.39%, up to 248.22p each. The price is the company’s highest since August 2018, and is about 38% ahead of the analysts’ consensus target price 153.57pa shares.
Analysts currently have a consensus “buy” stance on equities, but the MarketBeat community gives it a “underperformance” rating of 57.12%. The P/E ratio of 224.73 looks much more expensive compared to the average 38.53 in the service sector, but dividend yield is 1.44%.
