GardaWorld offers G4S trustees £770m funding package

The new offer is almost a quarter (24 per cent) larger than an earlier bid rejected by G4S in September, and would see the security business pay 253p per share instead of the previous bid’s 190p per share – valuing G4S at £3.68bn.

GardaWorld has been attempting the takeover for a number of months, and the new bid is the latest instalment in a protracted and occasionally fractious process.

As Pensions Expert reported in September, BC Partners, which owns 51 per cent of GardaWorld, complained that it was being obstructed in its attempts to outline proposals to deal with the G4S pension scheme’s £276m deficit.

According to The Times, BC Partners stated they were concerned “that the G4S pension scheme has been persistently underfunded for many years”, a contention G4S would deny in October.

In a statement on Tuesday, GardaWorld announced it had reached an agreement with the G4S scheme trustees on a £770m support package comprising cash and other measures.

“GardaWorld and BC Partners believe that this package, which offers a step change in the magnitude of funding relative to the existing scheme, provides a definitive resolution to the persistent deficits that have been a feature of G4S’s UK defined benefit pension arrangements.

“The package significantly enhances the certainty of pension benefits for G4S’s current and past employees through the collective commitment to industry best-practice funding levels in a well-defined timeframe,” the statement read.

G4S has committed this year to making deficit repair contributions of £53m annually to the scheme, though this is more than twice the group’s reported profits for last year. 

G4S remains in discussions with another suitor, security company Allied Universal, which has until December 9 to submit a formal offer, after G4S rejected its £3.25bn bid last month.