Canada’s GardaWorld expects to incur as much as 312 million pounds ($403 million) in fees and expenses if it succeeds in its hostile takeover offer for U.K. rival G4S Plc, according to offer documents published by the security group.
Garda, which made a near 3 billion-pound hostile offer for G4S, could pay as much as 180 million pounds in financing fees if it succeeds in acquiring the U.K. firm, according to the documents published on Saturday. Fees incurred for financial advice could range anywhere between 1 million pounds and 100 million pounds, the Canadian company said.
Garda made a hostile takeover bid for G4S last month after failing to convince its management to come to the negotiating table. It’s been seeking meetings with G4S shareholders to persuade them to accept the proposal, which G4S has rejected on the grounds that it undervalues the company.
If Garda succeeds in its offer, the deal could prove to be a windfall for its advisers at a time when merger-and-acquisition activity has been impacted globally amid the coronavirus pandemic. Aside from financing and advisory fees for banks, legal expenses are expected to be 9 million pounds to 18 million pounds. Garda expects to pay as much as 7 million pounds for public relations advice, the documents show.
In its offer document, Garda alleged that G4S shareholders are being provided with “baseless optimism” and that there is a lack of “tangible outlook, profit forecasts or visibility towards dividend resumption” at the firm.
“There is nothing new here. The terms of the offer remain unchanged from those contained in GardaWorld’s announcement on Sept. 30, which the Board unanimously rejected on the basis that it significantly undervalues the company and its prospects and is not in the best interests of shareholders or other stakeholders,” a representative for G4S said in a statement.
A combination of Garda and G4S would create a global security firm with more than 600,000 employees -- with about half a million coming from the latter. The firms provide guards to places including airports and prisons and have operations around the world.
G4S said last week that it received takeover interest from competitor Allied Universal Security Services LLC. Major G4S shareholders have so far been unconvinced by Garda’s cash offer. Harris Associates and Sachem Head Capital Management both view the bid as too low, Bloomberg News has reported.
Barclays Plc, UBS Group AG, Bank of America Corp and Jefferies Financial Group Inc. are advising Garda on the deal. Citigroup Inc and JPMorgan Chase & Co. are advisers to G4S.
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