Shares of G4S PLC (LON: GFS) are trading moderately lower today after printing a new 19-month high this morning on a promise to resume dividend in 2021.
G4S is desperately trying to please its shareholders amid a battle with a hostile bidder GardaWorld. The company said it expects to generate free cash flow of more than £1 billion between 2021-2025, in addition to a higher revenue by 4%-6% per year and margins to 7%
“G4S has a bright future as an independent company with significant value upside for shareholders. 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,” John Connolly, G4S chairman said in a statement.
“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. The GardaWorld Offer does not remotely reflect G4S’s fundamental value, let alone its value to GardaWorld and BC Partners. We urge shareholders to take no action in relation to GardaWorld’s Offer.”
GardaWorld has made an offer worth 190p in cash for each G4S share to value the company at £3 billion. This offer, as well as a rumoured offer from Allied Universal Security worth 210p per share, are lower than the current market price of 226p.
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