Hostile Takeover Looms At G4S

  • Fleming to buy all shares in G4S
  • Competitions Authority invites stakeholders with views to make contact


American security services firm, Garda World Security Corporation, wants to acquire all shares in global security company G4S in what seems to be a hostile takeover.

As the body responsible for prevention of and redress for anti-competitive practices in the local economy, the Competition and Consumer Authority (CCA) has announced that is has received a merger notification for the proposed acquisition of the entire issued and to be issued share capital in G4S Plc (G4S) by Fleming Capital Securities other than those already held by Fleming or its related companies, resulting in the sole control of G4S by Fleming.

The target company, G4S, is a global integrated security company offering a broad range of security services worldwide. The multinational security company trades primarily through its subsidiaries and joint ventures in numerous jurisdictions, including Botswana. In Botswana, G4S has three subsidiaries, namely G4S (Botswana) Ltd, which is listed on the Botswana Stock Ex-change, for manned security and electronic security, Fidelity Cash Management Services (Botswana) (Pty) Ltd for cash solutions and G4S Facilities Management Botswana. These companies are registered in Botswana.

The acquiring enterprise in Flem-ing is a stock corporation formed pursuant to the General Corporation Law of the State of Delaware, United States of America. Fleming is a 100 percent subsidiary of Garda USA Inc. which is in turn a wholly owned subsidiary of Garda World Security Corporation. According to CCA, Fleming is a special purpose vehicle established for the purpose of this transaction and as such does not have assets in Botswana nor does it generate any turnover in, into or from Botswana.

“Any person, including a third party not party to the proposed merger, may voluntarily submit to the inspector or the Authority any document, affidavit, statement or other relevant information in respect of the proposed merger,” CCA said in their merger notice published recently. The Authority further sought any stakeholder with views for or against the proposed merger to con-tact them within 10 days from date the merger notice was released.

Meanwhile, the Garda G4S hos-tile takeover has seen the two companies being involved in a tug of war with international news agency in Bloomberg reporting that Garda made a £3 billion ($3.8 billion) hostile takeover bid for G4S in Septem-ber, a month after failing to convince its management to come to the negotiating table.

According to Bloomberg, Garda has 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. “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,” Bloomberg reported.

According to Bloomberg, if Garda succeeds in its offer, 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.