I am happy with the way matters are moving here.

auction

today better!!!

well chuffed - what a result today - yeeeeeeeeeeeeeeehaaaaaaaaaaaaaaa

skinny did you sell today or still hanging on - gl

I had a limit in which didn't get hit - so I'm still in.

Graham Ruddick, 6:16, Wednesday 19 October 2011

The chief executive of G4S (Other OTC: GFSZF.PK - news) will fly to America on Wednesday in an attempt to secure backing from key shareholders after City analysts warned his 5.2bn deal to buy ISS is at risk of being voted down.

On Tuesday, G4S was hit by a string of downgrades as analysts expressed concern at the amount of debt the security group will assume, how it will manage 1.2m staff, and why the group, based in Crawley, West Sussex, is moving away from its strength in security.

Analysts at Citi raised the prospect of G4S shareholders rejecting the deal and the 2bn rights issue which will finance it, upgrading their rating on the company partly because the acquisition could collapse.

Nick Buckles, the chief executive of G4S, is understood to be travelling to the US to meet key investors such as Harris Associates, BlackRock (NYSE: BLK - news) and Marathon Asset Management, who are top 10 shareholders.

The leading investors in G4S were quiet on the deal on Tuesday but shares in the group recovered 9.8pc, or 21.6p, to 241p. G4S shares crashed by 22pc on Monday after the company announced it wanted to buy the cleaning and catering provider ISS.

Copenhagen-based ISS is owned by EQT Partners, the private equity arm of Sweden's Wallenberg family, and GS Capital Partners, Goldman Sach's investment division. G4S will pay the investors 1.5bn in cash and shares, leaving them with a stake of 11.3pc in the enlarged company, and assume 3.7bn of debt.

The prospectus for the deal shows ISS has lost money on a pre-tax level for at least the past three years, despite revenues of more than 7bn, because of financing costs on the debt.

Citi said it was basing its 300p target price on G4S not acquiring ISS and adding "75pc of attending votes at the November (Stuttgart: A0Z24E - news) 2 emergency general meeting [EGM] are required to approve the 390m G4S share issue to ISS's vendors. With EGM attendance unlikely to reach 100pc, perhaps only 15pc to 20pc of outstanding equity would be needed to block the transaction."

David Brockton, at Espirito Santo, warned: "From an opportunity/cost perspective, the acquisition of ISS will limit the group's ability to deploy capital to accelerate growth in other business areas, with faster underlying growth eg emerging market security. As such, we are yet to be convinced that the end justifies the means."

hi dc - yep i have heard that today too but others at citi disagree - depends who one asks really - bit of a debate going on

the yes camp at citi are citing synergies etc - the no camp the obvious in the box stuff

its up in the air from here!!! monitoring closely

gl skinny

may well get voted down though so may need to put my gambling hat back on lol! buckles needs to sell this well or .....

Good luck gibby and skinny, Just keep an eye and i am sure you will not go wrong. dc

Just closed 242.6

nice one well done skinny

More news

G4S shareholder Parvus says 5.2bn ISS deal is 'dangerous'


Graham Ruddick, 20:58, Thursday 20 October 2011

One of the largest shareholders in G4S (Other OTC: GFSZF.PK - news) has said it will vote against the 5.2bn acquisition of cleaning group ISS, calling the deal "dangerous".

London-based hedge fund Parvus Asset Management is the third-largest shareholder in security group G4S with 3.7pc and is the first investor to publicly express its opposition to the deal.

Parvus founder Edoardo Mercadante told The Telegraph on Thursday that the 5.2bn deal "jeopardises the future health of the company" and "doesn't make sense" given G4S's success in security since founding in 2004.

Shareholders will vote on the deal on November (Stuttgart: A0Z24E - news) 2, but G4S already appears to be facing a rebellion from at least one investor. A second top-20 shareholder said the acquisition of ISS is "absurd" and "totally unnecessary".

G4S needs 75pc of voters to support the deal or it will collapse. Nick Buckles, chief executive, believes buying ISS will allow G4S to offer a wide range of services to customers. The company is financing the deal with a 2bn rights issue and 3.7bn of new debt facilities.

However, Mr Mercadante said: "I don't think they need to go into cleaning and basic services with such leverage and a big step."

He said the acquisition was a "big strategic change" given that Mr Buckles had previously spoken about expanding G4S into higher-margin specialist security and emerging markets. It is understood Mr Buckles instead decided to turn G4S into a provider of integrated services after a strategic review by consultants Bain earlier this year.

Parvus has been invested in G4S through contracts for difference since April 2010. These were swapped into shares on Wednesday. The number of hedge funds with a position in G4S is expected to rise because of the sharp fall in the share price since the deal was announced and the possibility of the deal not completing.

In a note on Thursday, analysts at Collins Stewart (Other OTC: COLLF.PK - news) said the ISS deal "destroys significant shareholder value" in G4S. They were using their analysis service Quest, which calculates the value of businesses on the basis of cashflow.

yep dc - they are ganging up lol

this is the reason blue here today in the end - likely up again tomorrow prob by more - but also dont forget the friday profit takers lol

gla

Just thought it may help. Good luck. dc

cheers always like info - hope you have a good one too

Has UK security giant G4S lost the plot?



Graham Ruddick, 21:46, Saturday 22 October 2011

When City analysts and leading institutions gathered in May to hear from Nick Buckles, little did they know that plans to radically reshape G4S (Other OTC: GFSZF.PK - news) were already under way.

Buckles was in credit with the City. The chief executive had just delivered a sixth consecutive year of revenue, profit and dividend growth. Since the merger of Securicor and Group 4 Falck in 2004, the security group had been one of the FTSE's star performers.

At the helm since 2005, Buckles explained to his audience at the company's annual capital markets day how it was dealing with government spending cuts and how G4S would approach acquisitions.

After a quiet period following the recession, the 50-year-old said, the highly acquistive G4S was ready to spend more than 200m a year on targets.

A slide in the presentation showed that when expanding into new geographical markets, G4S was focused on four areas manned guarding, cash services, monitoring and facilities management.

Summarising the position, Buckles said: "In terms of strategy, we are still very much focused on being a secure solutions group on outsourcing of strategic security and risk processes."

Those present did not appear to have considered his comments on facilities management deals particularly important. Nor were there any questions on whether G4S was interested in buying ISS, the giant European cleaning and facilities management firm put up for sale by its private equity owners after a failed float at the start of the year.

After all, G4S ran prisons, guarded cash and will provide security for the 2012 Olympics so why would it buy a cleaning and catering company? But just five months on that is exactly what the company has done.

Last Monday, Buckles announced G4S had agreed to buy ISS for 5.2bn from the private equity arm of Sweden's Wallenberg family and GS Capital Partners, the private equity unit of Goldman Sachs (NYSE: GS - news) .

A total of 1.5bn would be paid to the owners in cash and shares, leaving them with a 11.3pc stake in G4S. The deal is to be financed by a deeply-discounted 2bn rights issue and a new 3.7bn debt facility.

The City was shocked. Although the biggest 12 shareholders in G4S had apparently been told of the deal on the previous Thursday and Friday, shares in the company slumped 22pc by the end of the day.

"The acquisition of ISS represents a shift away from G4S's core strategy formulated two-and-a-half years ago," analysts at Collins Stewart (Other OTC: COLLF.PK - news) said, adding it destroys shareholder value.

G4S shareholders soon went public with their own concerns. Parvus, a London-based hedge fund, said the deal was "dangerous", while a second top 20 shareholder called it "absurd" and "totally unnecessary".

Investors who have enjoyed years of growth through G4S's success in security were being asked to bet substantial sums on sectors where the company has no substantial track record. And they were uncomfortable with it.

For the deal to succeed, G4S needs 75pc of voting shareholders to support the deal at a meeting on November (Stuttgart: A0Z24E - news) 2, and advisers close to ISS and G4S are, in private, seriously concerned it could fall apart.

Friday's news that keys capable of opening every door at Birmingham Prison which G4S has run since October 1 had been lost topped off a bad week for the company.

But this weekend, Buckles has had far more on his mind, as he held further talks with shareholders to try to convince them of the merits of the deal.

Having flown to the US last Wednesday for talks with US investors, he will tomorrow travel to Copenhagen to meet Scandinavian shareholders inherited from the Group 4 merger. A number of leading UK investors are also understood to have demanded face-to-face meetings with him.

One top 20 UK shareholder told The Sunday Telegraph there was "genuine hurt" among investors that they had been approached about the deal only at the tail-end of the process. "We are the owners of the business, not the investment banks," said the investor. "They trusted the investment bankers more than the shareholders and that is stupid."

The shareholder said the vote feels "reasonably close" at the moment and the US shareholders will "find this difficult" to accept because of the size of the rights issue.

He added: "I think it will be a bloody hard uphill struggle from here."

Buckles will be hoping the second week of talks progresses more successfully than the first, as echoes of Prudential (LSE: PRU.L - news) 's failed $35.5bn (22.2bn) bid last year for AIA which faltered due to poor communication and faltering shareholder support became all the more apparent.

Buckles' problem is convincing investors that rather than an opportunistic strategic U-turn, ISS is fundamental to G4S succeeding in the markets of the future. Critics of the deal do not understand why ISS is worth increasing G4S's leverage to more than three times earnings before interest, tax, depreciation and amortisation (Ebitda), increasing its exposure to Western Europe (Chicago Options: ^REURUSD - news) and reducing security revenues from 82pc of the business to 42pc.

"ISS is more of an opportunistic purchase that runs slightly counter to our expectation of the group's prior strategic ambition," said David Brockton at Espirito Santo.

Edoardo Mercadante, the founder of Parvus, added: "I have never been exposed to a company with a trebling of the share count."

He claims the 100m of annual pre-tax savings by 2014 are "peanuts" given the size of the deal and the numbers only stack up because G4S will be able to lower ISS's tax rate from 32pc to below 26pc.

Then there is the challenge of integrating 1.2m staff across more than 100 countries, an unprecedented feat, even before taking into account that ISS has made 600 acquisitions of its own over the past decade. Buckles accepts this is the "highest risk" in the acquisition. However, for him, ISS is worth it.

Last Monday's announcement was the culmination of work that began in February for G4S. The board commissioned consultants Bain to conduct a review of the company and its markets which was presented to it in May.

Although the findings remain private, they are thought to say the future of support services will revolve around offering integrated contracts to customers, becoming a one-stop-shop for everything from cleaning to security.

With ISS in play after its $2.4bn float was pulled in January, talks between the two sides began firmly in June. A source close to the deal said: "This is a multi-year acceleration of the strategy. In two or three years this transaction will look completely obvious."

The source also dismissed criticism that the deal could hinder G4S's drive into emerging markets. They claim Buckles has reiterated his target of securing 50pc of revenues from emerging markets by 2015 and that the deal will bring "revenue synergies". Nonetheless, this was not a deal that shareholders had pushed for, nor expected.

G4S's advisers claim leading investors apart from Parvus have shown "every sign" of being supportive.

But with Buckles' neck firmly on the line, the next seven days will be crucial if he is to gain enough momentum for what he called this "market changing" deal to come to fruition

The big question haunting the G4S mega-deal

Kamal Ahmed, 21:46, Saturday 22 October 2011

If you owned a Rolls-Royce, what would it take to persuade you to put some go-faster stripes down the side and an extra engine in the boot? That must be the question many investors in G4S are asking themselves.

G4S is planning to sell off large swathes of ISS in France if its controversial 5.2bn deal for the cleaning and catering group is approved by shareholders.

G4S says held supportive meetings with shareholder
15:30, Sunday 23 October 2011

LONDON (Reuters) said it had received positive feedback from shareholders over its proposed 5.2 billion pounds bid for ISS and Chief Executive Nick Buckles expressed surprise over the fall in the company's share price.

"We have had some good supportive meetings and are working hard to talk with investors about the rationale and significant benefits and our belief in this transaction," a G4S spokesman told Reuters on Sunday.

Shares in G4S lost over 20 percent of their value on Monday after it said it would buy the Danish support services company -- partly due to the dilutive impact of a proposed 2 billion pounds rights issue to help fund the deal.

In an interview with the Sunday Times, G4S's Chief Executive Nick Buckles said the share price reaction had been a shock.

"I knew the size and scale of the deal would surprise the market but we thought it would be received really positively," he said.

Since the offer was announced, G4S, which is the world's biggest security company, has faced a backlash from some shareholders who have objected to the strategy and financing behind the deal.

Aside from balking at the size of the rights issue, the biggest equity fundraising in Britain since a 3.4 billions pound cash call by Standard Chartered (Xetra: 859123 - news) last November (Stuttgart: A0Z24E - news) , some shareholders have raised concerns over G4S moving away from its security services roots into areas such as cleaning and catering.

Buckles told the Sunday Times he had "pre-briefed" key shareholders the week before the deal was announced and still believes he has their approval.

"I just think people felt they had to take a view very quickly on Monday, but this is one to digest slowly. It's early days. We still have investors to see," he said.

The Sunday Times also reported that Institutional Shareholder Services, a governance body that advises 1,700 large investors, had recommended shareholders vote against the deal at a general meeting on November 2.

The shareholder body said the deal was a departure from G4S's strategy to focus on small deals in emerging markets and raised concerns about integrating the two big companies and the level of debt that G4S would be left with.

G4S told Reuters on Sunday it had not held meetings with Institutional Shareholder Services and therefore had not been able to brief them on strategy.

"They have not met the company, they have not heard their strategy and there are factual inaccuracies in the report," the G4S spokesman said, adding that the company had previously said it would look at large and transformational deals.

Investors told to block G4S Danish deal


James Hurley, 20:26, Sunday 23 October 2011

A major investors' advisory group is the latest dissenting voice to join growing shareholder opposition to G4S (Other OTC: GFSZF.PK - news) 's planned 5.2bn takeover of Danish cleaning and catering company ISS.

US-based Institutional Shareholder Services, which advises 1,700 large investors, has voiced concerns that the deal would represent a departure from the security giant's strategy of focusing on small tactical deals in emerging markets, as previously set out by G4S chief executive Nick Buckles. The governance body also highlighted the risks of integrating 1.1m staff across 100 countries and the debt burden the deal would put on G4S's balance sheet

good stuff dc - i am told one of the main concerns is the fact t/o means that gfs will strategically be concentrating on the west rather than rest of the world - this has investors concerned with current econ. climate - investor also annoyed they will be taking on debt and moving to non core areas - i personally looking forward to tomorrow here as will be very interesting imo - gl