European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Gubel/Prosegur: Partial Takeover Offer at Interesting Spread

Gubel/​Prosegur: Acceptance Period, Spread

G4S Deploys Its Defences and GardaWorld Increases Its (Final?) Offer

Event-Driven

The contest for <a href="https://www.smartkarma.com/entities/g4s-plc" target="_blank" data-smartkarma-citation="entities:21948:1" rel="noopener">G4S PLC (GFS LN)</a> will be settled by an unfrequent head-to-head auction if neither GardaWorld or Allied Universal has sent a revised (read knockout) offer before 5.00pm on Saturday 20 February and prevailed by then.
<ul>
<li>
The procedure provides for up to five days of public bidding over sequential business days, with February 22 set as the first day of the auction.
</li>
</ul>
The Telegraph reported that the City expected GardaWorld to return well above Allied Universal’s offer.
<ul>
<li>G4S is a scarce asset.</li>
<li>It is the world’s largest security company, with £7 bn annual turnover and 530,000 employees worldwide.</li>
<li>G4S is trading at higher multiples than <a href="https://www.smartkarma.com/entities/securitas-ab" target="_blank" data-smartkarma-citation="entities:22476:1" rel="noopener">Securitas AB (SECUB SS)</a>.</li>
</ul>
For either bidder, it would be a transformational deal, with some economies of scale and, above all, long-term contracts and relationships:
<ul>
<li>Allied Universal, California based, has annual revenues of about £6 bn and 250,000 employees.</li>
<li>GardaWorld, backed by BC Partners, has annual revenues of about £2 bn and 100,000 employees.</li>
</ul>
Revised bids could come in the region of 282p, valuing the equity of G4S at c. £4,361 mn. Bids could go even higher.
<ul>
<li>G4S shares are trading at 269p, as investors bet that improved offers are coming.</li>
<li>The gross spread to a 282p hypothetical revised offer is 4.6%.</li>
<li>
HOLD your breath if you've already got the trade on, go LONG if not, although the latter involves both second guessing the bidders and a maximum downside of c. 9% (using 269p vs. Allied's last offer).</li>
</ul>

The contest for G4S PLC (GFS LN) will be settled by an unfrequent head-to-head auction if neither GardaWorld or Allied Universal has sent a revised (read knockout) offer before 5.00pm on Saturday 20 February and prevailed by then.


The procedure provides for up to five days of public bidding over sequential business days, with February 22 set as the first day of the auction.


The Telegraph reported that the City expected GardaWorld to return well above Allied Universal’s offer.

G4S is a scarce asset.
It is the world’s largest security company, with £7 bn annual turnover and 530,000 employees worldwide.
G4S is trading at higher multiples than Securitas AB (SECUB SS).

For either bidder, it would be a transformational deal, with some economies of scale and, above all, long-term contracts and relationships:

Allied Universal, California based, has annual revenues of about £6 bn and 250,000 employees.
GardaWorld, backed by BC Partners, has annual revenues of about £2 bn and 100,000 employees.

Revised bids could come in the region of 282p, valuing the equity of G4S at c. £4,361 mn. Bids could go even higher.

G4S shares are trading at 269p, as investors bet that improved offers are coming.
The gross spread to a 282p hypothetical revised offer is 4.6%.

HOLD your breath if you've already got the trade on, go LONG if not, although the latter involves both second guessing the bidders and a maximum downside of c. 9% (using 269p vs. Allied's last offer).


G4S PLC

G4S Heading for Takeover Panel Auction