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G4S plc: Statement Regarding GardaWorld Offer

G4S plc
·7-min read

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

30 September 2020

Statement regarding GardaWorld offer

G4S plc (“G4S” or “the Company”) notes the announcement made earlier today by GardaWorld Security Corporation (“GardaWorld”) of an unsolicited offer of 190 pence in cash per share (the “Offer”) to acquire the entire issued and to be issued share capital of G4S.
The Board of G4S unanimously rejects this Offer. The value is unchanged from the last proposal received from GardaWorld.
On 14 September G4S announced that the Board, following careful consideration together with its financial and legal advisors, had unanimously rejected GardaWorld’s proposal on the basis that it significantly undervalues the Company and its prospects and is not in the best interests of shareholders or other stakeholders.
The Board of G4S has reached its conclusion based on a number of important considerations including, inter alia, that:

  • the timing of the Offer, during the global pandemic, is highly opportunistic;

  • G4S is at a critical inflexion point in the execution of the Company’s corporate strategy and is now well placed to realise the benefits of the fundamental re-positioning of the Company, which has included:

    • Significantly reshaping the G4S portfolio over recent years, exiting mature, sub-scale, lower margin and capital intensive businesses, re-deploying investment and focusing on growing its security and technology businesses in addition to extracting significant cost savings;

    • Resolving a significant number of longstanding and material legacy liabilities and onerous contracts, and putting in place enhanced governance and controls to mitigate the risk of future liabilities and losses;

    • The sale of G4S’s conventional cash business in February 2020 which has strengthened G4S’s strategic, commercial and operational focus while providing additional strength to its balance sheet;

  • the Company’s resilient performance in the first 8 months of 2020 provides confidence in the refreshed strategy and its continuing execution; and

  • taking the above and other relevant factors into account, the Board believes that the Company is increasingly well placed to deliver growth, profitability and substantial free cash flow as it executes its strategy and delivers its vision of being the world’s leading global, integrated security company and the trusted partner of choice in the industry.

John Connolly, Chairman of G4S, said:

“The unsolicited 190p Offer launched today by GardaWorld is unchanged from the proposal that has already been carefully considered and unanimously rejected by the G4S Board as significantly undervaluing the Company and its prospects. Since rejecting GardaWorld’s last proposal, G4S has announced continuing resilience in its trading with underlying earnings ahead of the prior year for the first eight months of 2020.”
Shareholders are strongly advised to take absolutely no action in relation to the unattractive and opportunistic Offer.
A further announcement will be made in due course.
G4S Financial Advisors

Citigroup Global Markets Limited
J.P. Morgan Cazenove

Important Notices
Citigroup Global Markets Limited ("Citi"), which is authorised by the Prudential Regulation Authority (”PRA”) and regulated in the UK by the Financial Conduct Authority (”FCA”) and the PRA, is acting exclusively for G4S and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than G4S for providing the protections afforded to clients of Citi nor for providing advice in relation to any matter referred to herein.

J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove") which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting as financial adviser exclusively for G4S plc and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than G4S plc for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 Disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.G4S.com, by no later than 12 noon (London time) on the business day following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.