G4S makes 2021 dividend promise as it battles Canadian suitor

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G4S PLC (LON;GFS) has promised to resume dividends in 2021 as it battles against hostile bidder GardaWorld.


The security group also repeated that it expects to generate free cashflow of more than GBP1bn between 2021-2025, increase revenues by 4%-6% a year and lift margins to 7%.


In a statement, John Connolly, G4S chairman reiterated: “The Garda World Offer does not remotely reflect G4S‘s fundamental value, let alone its value to GardaWorld and BC Partners.


“The Board believes that G4S has significant potential to re-rate as a result of its above-market growth outlook, higher margins from integrated security services and the material value upside in Retail Cash Solutions.


“The Company’s resilient performance and positive outlook enables it to resume the dividend for 2021 and provides clear potential for significant further cash returns to shareholders,” he said.


GardaWorld has offered 190p in cash for each G4S share, which values the group at GBP3bn.


A possible rival offer has been mooted by US firm Allied Universal Security and is said to be worth 210p per share, but this too has been described by GFS management as undervaluing the FTSE 250 group.


GardaWorld recently extended its offer until November 28 having received acceptances of 1.72% at the first closing date.


It responded the G4S update by saying: “After 39 days, shareholders only merit ‘aspirational’ targets, not forecasts. And now, jam the day after tomorrow.


“Shareholders should be alarmed that their funds are earmarked to promise an unspecified size and policy on dividends, resuming a year later than G4S’s peers.


“The simple fact is that any value created in G4S’s shares since June has happened only because of us.”


G4S shares eased a touch to 226.7p.




— adds GardaWorld comment, share price —



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