iNVEZZ.com Monday October 28th: G4S’ share price (LON:GFS) today rose by more than one percent at the opening of the London Stock Exchange after the international security group said it had rejected a ₤1.55 billion offer from Charterhouse Capital Partners for its Cash Solutions division.
G4S said the nonbinding, indicative and conditional offer from the private equity fund had been received on Tuesday last week but that the board considered the division’s retention to be vital to the company’s business. “The offer has been firmly rejected considering the strategic importance of the cash solutions businesses to G4S and because the board believes the conditional offer fundamentally undervalues the business and its prospects,” G4S said in a statement today.
The Cash Solutions unit, whose services include secure cash transportation for financial institutions and retailers, accounted for about 18 percent of group turnover last year.
G4S-operated jail investigated over abuse claims
Meanwhile, a G4S-run South African prison is under investigation for the alleged use of forced injections and electric shock treatment to subdue inmates. The revelations come just weeks after the South African government stepped in to assume control of the prison after finding that the security company had “lost effective control” in the wake of a series of riots, strikes and a hostage taking.
G4S has denied any acts of assault or torture, either by means of medical substances or electroshocking, against inmates. “G4S has a zero tolerance policy against the use of undue or excessive force," the company said. Andy Baker, the president of G4S Africa, explained that inmates were given injections only if they required medication. "It is important to note that the G4S people do make the decision to medicate, the medical staff do not work for G4S, they are a completely independent entity,” Baker told the BBC.
G4S UK chief resigns
G4S announced last week that its UK chief executive Richard Morris had resigned and been replaced by the chief operating officer Eddie Aston.
Morris had been with G4S for over 10 years and in September 2012 took charge of a British and Irish business which last year generated about 25 percent of the group’s ₤7.3 billion in revenues. He leaves at a time when G4S is trying to recover from a series of scandals which have damaged its relationship with the UK government.
Morris’ departure came less than two weeks before new group CEO Ashley Almanza outlined his strategy for the business. Almanza took the helm in June after former CEO Nick Buckles resigned due to a string of setbacks. The new G4S head has already raised ₤348 million through a share sale and said more cash would come from asset disposals as he looks to trim debt and focus on emerging markets growth.
As of 09.54 BST buy G4S shares at 261.30p.
As of 09.54 BST sell G4S shares at 261.00p.