Canada’s Garda World Security said on Wednesday it was considering a cash offer for some or all of G4S, sending shares in the world’s largest listed security company up almost a third for their biggest daily gain in a decade.
At 1409 GMT, G4S shares were up 18 percent at 218 pence, adding half a billion pounds to its value and taking the British security company’s market capitalization to about 3.4 billion pounds (US$4.4 billion). The stock earlier hit a six month high of 241.8 pence.
An offer could mark a change of fortune for G4S, which is struggling to recover from a string of scandals, notably a failure in 2012 to provide enough guards for the London Olympic Games.
Only last week, the British government said it would permanently take over the running of a prison in Birmingham, central England, from G4S after inmate violence made the goal unmanageable.
The statement from privately-held Garda World came after London’s Evening Standard newspaper reported market talk of a potential bid.
G4S, which has more than 500,000 employees across 90 countries, declined to comment on the report and could not immediately be reached for comment on Garda World’s statement.
“Garda World notes the recent market speculation in relation to G4S and confirms that it is in the preliminary stages of considering an approach to the board of G4S regarding a possible cash offer for the company, or a part thereof,” the Montréal-based company said.
G4S said in March it had received interest from potential bidders for its cash business, which includes Cash 360 machines operated by retailers and a cash transportation business.
According to Garda World’s website, it also owns a cash solutions business, along with security services operations which include screening passengers at airports.
“Buying G4S would be a stretch as Garda World only has 2 billion pounds revenue (G4S: 7 billion pounds), but they are plausible contenders for Cash Solutions or perhaps a post-transaction G4S,” Jefferies analysts wrote in a note.
Update: Garda World is a portfolio company of U.S. private equity firm Rhône Capital.
In 2017, Rhône and and Garda World’s Founder, Chairman and CEO Stephan Crétier acquired the business from Apax Partners. Rhône increased its existing stake in Garda World to 61 percent as a result of the deal.
(Reporting by Thyagaraju Adinarayan; additional reporting by John Benny; editing by Josephine Mason and Mark Potter)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)