Garda World Security Corp. will have to pay $13-million plus expenses if the security and logistics firm accepts a higher takeover offer than a proposed $1.1-billion deal with its CEO and British private equity firm Apax Partners.
The break fee information was included in a proxy circular Friday that was issued ahead of a planned Oct. 24 ratification vote by shareholders.
The company also stands to receive $12-million if the purchasers fail to close the deal first announced earlier this month.
The Garda board of directors has unanimously recommended shareholders approve the privatization deal for the company which founded by chief executive Stephan Cretier in 1995.
Under the proposed agreement, a joint venture between the Cretier Group and an Apax subsidiary will pay $12 per share in cash for the shares they do not already hold and will assume $625-million of net debt.
Mr. Cretier, who owns a large stake in Garda, will retain a 24 per cent stake after the transaction, while Garda directors and key managers are also rolling over their shares for a total ownership stake of 27.2 per cent.