G4S hits back over thwarted Shield acquisition
G4S will not proceed to High Court over decision to block acquisition
The Botswana arm of G4S Limited has announced that it will not take seek recourse at the High Court over the Competition Authority’s decision to block its acquisition of Shield Security.
Managing director Moraki Mokgosana, though reported to be ‘deeply disappointed’ has said the company will instead focus on other opportunities in the local market.
The Competition Authority blocked G4S' multi-million bid for Shield Security earlier this year, saying the acquisition of the security company would substantially lessen competition in the market. Following the decision, a minority shareholder made a successful bid to the business. The Competition Authority has subsequently barred G4S from wooing any of Shield's clients for two years, after allegedly sensing an attempt by parties involved to sidestep its decision by closing Shield, forwarding clients to G4S and stripping assets.
"We have always said we welcome the establishment of the Competition Authority and we respect their decisions, but we believe there are many inconsistencies with these decisions and we hope to have answers one day. We are disappointed with the authority's decision and the logic behind it. By the grace of God, we will get answers one day," said Mokogosana in a report carried by MMEG.
Talks between existing shareholder, FMG, and G4S began over three years ago, for the takeover of Shield, PS Cleaning Facilities Management; subsidiaries of FMG.
Mokogosana said the Authority saw ‘nothing wrong’ in preliminary assessments. However, in February this year, it rejected the bid for Shield and also Trojan, but approved the acquisition of PS Cleaning and Facilities Management.
But said, Mokogosana, G4S would not take the decision to High Court.
"We don't believe that after a three-year or so court case at the High Court, we would get any benefit. Already, a lot of uncertainty has been caused in the market."
He added that going ahead with the acquisition of PS Cleaning and Facilities Management was still viable, even without Shield Security on board as the recently finalised $1.5m acquisition, would boost G4S' corporate profile as a provider of outsource activities.