Security firm G4S has agreed to a sweetened takeover offer from its US rival Allied Universal Security Services, which values the British company at £3.8bn.
Under the terms of the cash offer, G4S shareholders would receive 245p a share. This is an improvement on the 210p a share previously offered by Allied Universal, which G4S said significantly undervalued the company.
G4S, which operates services including running four British prisons and managing 21 UK Covid-19 test centres, has been heavily criticised following a series of scandals about its work on UK government contracts.
Allied Universal said its offer included a significant premium on G4S’s share price at the beginning of the offer period in September.
However, the UK firm’s stock has jumped in the last three months since a bidding war intensified between two of its overseas rivals, and its shares closed at 255p on Tuesday.
G4S has been fighting off hostile takeover bids from its smaller Canadian suitor GardaWorld for several months. GardaWorld made a final bid of 235p a share earlier this month, valuing G4S at £3.68bn.
The directors of Allied Universal and G4S said that the combined company would create a “world-leading integrated security business with revenues of approximately $18bn (£13.5bn), a strong international platform and an extensive portfolio of blue-chip clients across the public and private sectors”.
G4S’s chairman, John Connolly, recommended that shareholders vote to accept the offer, which he said “represents an excellent opportunity to create a leading global security company, for shareholders to realise value for their investment at an attractive premium, while also ensuring the future success of G4S for employees, customers and other stakeholders”.
Allied Universal said that US regulators had already given the go-ahead for the merger to proceed.
G4S employs 533,000 people across 85 countries, with its biggest business in North America.
The firm has repeatedly hit the headlines after being stripped of several government contracts, including its contract to run HMP Birmingham, but the majority of its work emanates from corporate contracts.
G4S runs cash-handling services and provides security operations, including at the new Hinkley Point C nuclear power station.
