Latest on G4S Takeover: State Officials Want More Transparency From Allied, GardaWorld
The private-equity led bids for G4S has raised concerns that it could harm working conditions for security guards worldwide.
LONDON — State officials from Oregon and Illinois are calling for increased scrutiny of the potential takeover of G4S, which has pitted Allied Universal and GardWorld in an extended acquisition battle.
The private-equity led bidding for London-based G4S has raised concerns among unions as well, with concerns that a takeover could harm working conditions for hundreds of thousands of low-wage security guards worldwide, the Financial Times recently reported.
With operations in 83 countries, G4S staffs around 530,000 employees, providing guarding to embassies, prisons and justice services, sports stadiums and music events.
If either Allied Universal or GardaWorld succeeds in the bidding, the combined company would be one of the world’s largest private-sector employers.
The state treasurer of Illinois, Michael Frerichs, whose office manages about $35 billion and invests in private equity funds, urged institutional investors to demand greater transparency from both suitors, the Financial Times reported.
“Neither bidder has disclosed to us key aspects of their business plan, including how to manage opportunities and risks in the event of a merger,” Frerichs said in an online forum. “The vast majority of these employees are essential workers, raising the stakes for all stakeholders to review this transaction.”
Tobias Read, the state treasurer for Oregon, expressed he wanted to “learn more about how the companies will handle complicated questions”, including how to protect their workers’ health amid the pandemic. “Some corporations don’t really listen to smaller investors . . . as elected officials we tend to have a larger megaphone,” he said.
Oregon and Illinois have both previously committed funds to Allied owner Warburg Pincus. The European Works Council, representing G4S employees, has also written to shareholders calling for bidders to both rule out job losses and adhere to pledges on ethical investment, according to the Financial Times.
This past December, G4S reached a deal to be acquired by Allied Universal Security Services for $5.1 billion, after initially rebuffing a takeover bid from Allied Universal in November.
G4S first announced Oct. 9 that it had received an expression of interest from privately-held Allied Universal for a possible offer for the company. Canada’s GardaWorld had also put forward an offer of $2.48 a share for the company, which was rejected.
Allied boosted its offer to $3.26 per share, according to an announcement. G4S directors said they planned to unanimously recommend the deal to shareholders.
The offer beat out GardaWorld’s latest proposal of $3.13 per share, representing a 68% premium to G4S’s last close before announcing the initial takeover approach. Allied has committed financing and signed a preliminary agreement for future funding of G4S’s pension scheme, according to the announcement.
GardaWorld has said it is in discussions with its banks as to how much it could raise its offer for the G4S business.
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