The bidding war to take over security giant G4S has been thrown to an auction after neither interested party made a final bid.
Both Canada’s GardaWorld and US company Allied Universal are in the running to snap up the UK-based company.
The Takeover Panel, a body which regulates mergers and acquisitions mainly of listed firms, said the two rivals will be given a chance to make bids for the company in the week beginning February 22.
The board of G4S last month agreed to Allied Universal’s £3.8 billion deal, and has rejected the £3.7 billion advance from GardaWorld.
But the Takeover Panel said on Friday that it would have to step in to finalise the arrangements.
“On the basis that neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist,” the Takeover Panel said in a statement.
The race for G4S was kicked off in late September last year when GardaWorld made its first offer, valuing the company at nearly £3 billion.
Two months later it upped its bid to just under £3.7 billion, and reduced the acceptance rate it needed from shareholders to 50% and one vote from 90%.
A week later, Allied Universal entered the race with a £3.8 billion bid which needed 90% acceptance.
Shares rose by nearly 1% on Friday and were trading at a 22p premium to Allied Universal’s 245p per share bid.
It implies that investors are expecting higher bids to come during the auction later this month.
The Panel has today released Panel Statement 2021/3. Please visit our website https://t.co/29S6mIycHG to view it.
— The Takeover Panel (@TakeoverPanel) February 12, 2021
The auction will start on Monday February 22, and if one party has made a new bid by Wednesday the other will be given until Thursday to respond.
If both sides bid during the first three days then both companies will be given a chance to make a new bid on the Thursday.
The auction will end if no-one has made a new bid by Thursday, the fourth day. But if either party bids on day four, both will be given a chance to bid on day five.
The Takeover Panel said: “Each of G4S, Garda World and Allied Universal has agreed to the terms of the auction procedure and this statement.”.
The Takeover Panel steps in when bidders have not said their offer is final to ensure that shareholders do not accept one offer, only for the rival bidder to up its price. It acts as an independent referee, ensuring both sides get equal treatment.