GardaWorld extends its bid for rival G4S by two weeks, despite little uptake by investors

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Canadian security company GardaWorld has extended its offer for British-based rival G4S PLC by two weeks, buying some time to plot next steps in a takeover battle its chief executive badly wants to win.

Garda’s offer, which values G4S at about £3-billion pounds (C$5.2-billion at current exchange rates), will remain open until Dec.16, the Montreal-based company said in a statement Monday. Investors in G4S have proven reluctant to tender at that price, with Garda confirming it has received valid acceptances of barely 0.17 per cent of G4S shares as of Nov. 28.

“Throughout this process we have not seen a single piece of evidence to suggest that our offer of 190 pence in cash is anything other than full and fair,” Garda founder and chief executive Stephan Crétier said in a statement. “GardaWorld and [its majority owner] BC Partners are disciplined buyers who will not be susceptible to post-pandemic market euphoria.”

GardaWorld is trying to buy much-larger G4S in a transaction that would vault the Quebec company into the top five of global security suppliers and reshape the industry. For Mr. Crétier, who’s had his eye on a G4S bid for years, it’s highly personal – a chance for him to rescue a company started by a mentor that he says has lost its way under outside management.

“We’re going to be patient here,” the CEO told The Globe and Mail in an interview earlier this month. “People that follow me and follow the company know that I am a disciplined investor, I persevere and I’m patient. And I never let go.”

Premier François Legault’s government “fervently hopes” Garda will succeed in acquiring G4S and is available to support the company in that effort as needed, said Mathieu St-Amand, spokesman for Economy Minister Pierre Fitzgibbon. “This will allow a Quebec company to become a world champion and also to consolidate its headquarters in Montreal,” he said via e-mail.

Mr. Crétier has criticized G4S, calling it a “deeply troubled” company that has “disappointed everyone” in recent years. He has also lashed out at pension fund manager Caisse de dépôt et placement du Québec for undermining his takeover effort by backing a rival bid for G4S by U.S.-based Allied Universal Security Services.

That combative approach is likely working against him. The G4S board has declined to engage GardaWorld in meaningful talks and on Monday said the meagre number of shares won by the Canadian company so far reflects “the derisory level” of its offer. G4S insists it has a bright future as an independent company and vowed to resume paying a dividend next year.

Meanwhile, the Caisse appears at pains to understand why Mr. Crétier would pick a fight with the institution, given it made GardaWorld an offer worth more than $1-billion to help fund its G4S bid, an offer the Garda CEO declined in favour of another. The Caisse has sent GardaWorld a lawyer’s letter demanding it stop its public attacks.

Mr. Crétier might be betting G4S shareholders come to see Garda as its only option for a payout.

Allied has made what G4S has called a “highly conditional” offer of “at least” 210 pence per share, subject to substantial due diligence. Even if a firm offer materializes and shareholders tender to it, any tie-up between Allied and G4S would not pass anti-trust hurdles, Mr. Crétier has said.

Sticking with current G4S management is also a gamble, says the GardaWorld CEO. COVID-19 was not the cause of the slump in performance at G4S and neither will its hoped-for abatement be the trigger for improved business performance, Mr. Crétier said in the Monday statement.