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Garda faces $13-million break fee if takeover bid terminated

Garda CEO Stephan Cretier

Christinne Muschi/The Globe and Mail

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.

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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.

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