Gapping down
Other news:
- NKLA -9.8% (continued weakness following short report last week)
- MNK -9.2% (receives a Complete Response Letter from the FDA for terlipressin for the treatment of hepatorenal syndrome type 1)
- ZYNE -2.8% (provided update on its Fragile X syndrome and developmental and epileptic encephalopathies programs)
- VXX -0.5% (trading lower with US futures up over 1%)
Analyst comments:
- MGM -1.2% (downgraded to Sell from Neutral at Goldman)
- KR -0.8% (downgraded to Neutral from Buy at BofA Securities)
- TOT -0.8% (downgraded to Neutral from Outperform at Credit Suisse)
- JAZZ -0.6% (downgraded to Sell from Neutral at Goldman)
- CASY -0.5% (downgraded to Underweight from Neutral at JP Morgan)
Private equity-backed GardaWorld ramps up £3bn bid for G4S
Canadian group says UK security company has ‘dismissed or ignored’ 3 takeover attempts in 3 months
Private equity-backed GardaWorld is urging G4S shareholders to support its £3bn takeover bid for the UK security company as it ramps up attempts to buy its rival.
The Montreal-based group said the board of the FTSE-listed business had “summarily dismissed or ignored” its three attempts to buy the group in three months.
It offered 190p per share on August 31, which in total works out as £2.96bn, but was rebuffed, the buyout-backed group said.
G4S shares surged 25 per cent to 182.25p on Monday after the security company confirmed the move.
“G4S needs an owner, not a manager,” Stephan Crétier, founder and chief executive officer of GardaWorld, said in a statement on Monday. “GardaWorld has 25 years of experience in the sector and we know how to improve and repurpose this business.”
GardaWorld’s latest offer marks a 32 per cent premium to the stock’s previous closing price on August 28. Its first approach to the G4S board was on June 15, it said.
The group, in which private equity firm BC Partners owns a 51 per cent stake, “now encourages G4S’s shareholders to mandate their board’s engagement in collaborative discussions towards a transaction”, it said.
“This is an offer that your board should not ignore,” BC Partners’ chairman Raymond Svider and Mr Crétier said in a letter to G4S’s chairman John Connolly on August 31.
“This is an offer that we believe your shareholders would consider very seriously . . . You can now choose to engage, which we hope you will do and would welcome, or not.”
The deal would be funded with equity from BC Partners and debt that three banks had already agreed to provide, the letter said.
G4S shares tumbled at the beginning of the pandemic in February and March, hitting a low of just under 70p in early April, but have since regained some of their value. G4S declined to comment.
The move, potentially a starting point for a hostile bid, comes more than a year after GardaWorld walked away from a previous £3bn offer for G4S.
G4S is one of the UK’s biggest outsourcing companies, with about 500,000 staff and global revenues of about £3.5bn.
The company has been seeking to rebuild itself following a series of crises starting with the London Olympics in 2012 when it failed to recruit enough security staff and the army had to be drafted in to compensate.
It recently won a deal to operate a new £252m prison in Wellingborough, Northamptonshire, despite a decision last year to strip it of a contract to manage Birmingham prison seven years early, after inspectors found it “exceptionally violent”.
Last week the UK’s Serious Fraud Office charged three former executives of G4S with defrauding taxpayers following a long-running investigation into a scandal over its electronic tagging of offenders.
The decision to prosecute the employees comes despite G4S reaching a settlement with the SFO this year that means the company will not face criminal charges as long as it meets conditions to improve its corporate governance.
Gapping up
M&A news:
- IMMU +106.2% (to be acquired by Gilead (GILD) for $88.00 per share in cash)
- NVDA +6.5% (to acquire Arm for $40 bln)
Select ETFs trading higher:
- SMH +2.2%, IBB +2.1%, IGV +1.6%, QQQ +1.2%, SPY +1.1%, IWM +1.1%, DIA +0.8%
Other news:
- ETNB +26.9% (announced positive topline results from its Phase 1b/2a trial with BIO89-100 in patients with nonalcoholic steatohepatitis)
- SGMS +17.3% (announces that a number of long-term institutional investors, including highly credentialed gaming industry investor Caledonia, have reached agreement to acquire a 34.9% stake in SGMS from MacAndrews & Forbes at $28.00/share)
- DVAX +10.8% (announce commercial supply agreement for inactivated, Adjuvanted COVID-19 Vaccine)
- SGEN +9.3% (Seattle Genetics (SGEN) and Merck (MRK) to collaborate on two Oncology studies: Merck to acquire $1 bln equity stake in Seattle Genetics common stock)
- CEL +7.2% (appoints Shai Amsalem as the Company's CFO effective September 13)
- MOGU +5.6% (authorizes the repurchase up to $10 mln of its shares, effective until September 12, 2021)
- CNSL +5.6% (announces strategic investment from Searchlight Capital Partners; initiates refinancing)
- RADA +4.2% (receives $10 mln in accumulated new orders since mid-July 2020; reaffirms guidance)
- BNTX +3.6% (BioNTech and Pfizer propose expansion of pivotal COVID-19 vaccine trial)
- PFE +2.6% (BioNTech and Pfizer propose expansion of pivotal COVID-19 vaccine trial)
- AKBA +2% (amended manufacture and supply and facility construction agreement) NAV +2% (issues statement regarding revised proposal from TRATON; believes it serves as a starting point for exploring possibility of a transaction)
- MRK +1.3% (Seattle Genetics and Merck (MRK) to collaborate on two Oncology studies: Merck to acquire $1 bln equity stake in Seattle Genetics common stock)
Analyst comments:
- GME +11.8% (upgraded to Outperform from Market Perform at Telsey Advisory Group; upgraded to Buy from Hold at Jefferies)
- OSTK +7.5% (initiated with Buy at Needham)
- MU +3.9% (upgraded to Buy from Neutral at Goldman)
- AMKR +3.2% (upgraded to Outperform from Neutral at Credit Suisse)
- ANDE +2.9% (upgraded to Outperform from Market Perform at BMO Capital Markets)
- CRUS +2.5% (upgraded to Equal Weight from Underweight at Barclays)
- GPC +1.4% (upgraded to Overweight from Neutral at JP Morgan)
Early premarket gappers
- Gapping up:
- IMMU +106.6%, ETNB +26.9%, SGMS +16%, SGEN +10%, DVAX +7.8%, CEL +7.2%, NVDA +5.9%, MOGU +5.6%, CNSL +5.6%, RADA +4.2%, BNTX +3.7%, PFE +2.3%, AKBA +2%, MRK +1.4%, NAV +1.3%, BA +1.2%, VIAC +0.8%, AZN +0.7%
- Gapping down:
- MNK -13.3%, NKLA -6.6%, VXX -0.8%
French Finance Minister Bruno Le Maire is keeping his distance from the takeover dispute between LVMH and jeweler Tiffany & Co. and the French state’s role in helping to break up the deal.
“I have no particular comment to make on this subject,” Le Maire said. “Jean-Yves Le Drian took a decision that seemed the right one to him; he wrote this letter.”
“I have no particular comment to make on this subject,” Le Maire said. “Jean-Yves Le Drian took a decision that seemed the right one to him; he wrote this letter.”
>>> Up
* BP Raised to Outperform at Credit Suisse
* Nordea Raised from Neutral to Buy at UBS, PT SEK78 (+)
* Orange Raised to Buy at Oddo BHF (+)
* TLG Immobilien Raised to Buy at Jefferies; PT 22.70 euros
>>> Down
* Abcam Cut to Hold at Peel Hunt (+)
* Altice Europe Cut to Hold at HSBC; PT 4.50 euros
* CommerzBank Cut Sell from Neutral at UBS, PT €4.60 (+)
* H&M Cut to Underweight at Morgan Stanley; PT 90 kronor
* Inditex Cut to Underweight at Morgan Stanley; PT 18 euros
* Masmovil Cut to Hold at HSBC; PT 22.50 euros (+)
* MGM Resorts Cut to Sell at Goldman; PT $20 (+)
* Ryanair Cut to Hold at Liberum; PT 12.50 euros (+)
* SIF Cut to Sell at Kempen & Co; PT 11 euros
>>> Initiation
* Dialog Semi Rated New Outperform at BMO; PT 45 euros (+)
* Hill & Smith Rated New Hold at Shore Capital (+)
* Horizonte Minerals Rated New Buy at Peel Hunt; PT 14 pence
* Johnson Matthey Rated New Buy at Stifel; PT 2,850 pence (+)
>>> Call
* Bayer’s Glyphosate Progress ‘Too Early to Get Excited’ Over: DB
* BP Now Preferred Over Total at Credit Suisse, Citing Valuation
* HelloFresh a Buy, Pullback Provides Opportunity: Commerzbank
* Inditex and H&M ‘In the Eye of the Storm,’ Cut by Morgan Stanley
* Metro Shareholder Could Attempt ‘Creeping Takeover’: Jefferies (+)