Security company g4s stepped up its fight against a 3bn hostile takeover from smaller rival gardaworld on monday as it highlighted the resilience of its earnings despite the coronavirus pandemic.
In an attempt to persuade investors that a 190p-a-share offer from the canadian group is too low, g4s said profits in the first eight months of this year were ahead of 2019, despite pandemic-related disruption.
Although the global economic outlook remains uncertain, the groups performance in the first eight months demonstrates the strength of the business, the ftse 250 listed group said in a statement.
The company added revenues were just 1.9 per cent lower than last year and the fall had been more than offset by cost cuts and reduced interest costs as its debt position had improved.
Ashley almanza, chief executive, said: the benefits of our strategy, strong execution and timely response to covid-19 continue to be reflected in the groups results during 2020 with resilient revenue, earnings and cash flow.
Gardaworld, based in montreal and backed by private equity firm bc partners, has been rebuffed by g4s management three times.
In a statement last week, the group said it had made the 190p-per-share offer on august 31.
G4s is about four times larger than gardaworld with a turnover of 7.8bn versus 2.1bn for the smaller group.
The uk-listed company argues that the takeover significantly undervalues the group but has indicated it is open to a higher offer a view backed by its largest shareholder schroders. the shares have risen on news of the bid, but fell 3 per cent to 188.30p by late monday afternoon in london.
Gardaworld said: this is a management team that has simply run out of ideas. covid has generally been positive for businesses like this and yet they use it as a fig leaf to disguise their own failings.
Mr almanza took charge of g4s in 2013, ending controversial contracts running facilities at the guantnamo bay detention centre and providing housing for asylum seekers in britain.
Stephen rawlinson, analyst at applied value, said the eight-month figures were good news for g4s.
The trouble is, it is two-edged as on the one hand it says that incumbent management are no fools and the market is good, people need security even in a covid world, but on the other hand it emboldens potential buyers. either way, the g4s holders are, at least for now, winners.