* G4S recommends vote for Allied's final offer
* Allied offer open for acceptance until March 16
* Says acceptance level lowered to 75% from 90%
(Adds analyst comment, context, background)
By Yadarisa Shabong
Feb 23 (Reuters) - British private security group G4S
on Tuesday urged shareholders to accept Allied
Universal's 3.8 billion pound ($5.4 billion) final offer after
the end of the U.S. bidder's drawn-out takeover battle with
Canada's GardaWorld.
Hostile bidder GardaWorld had called a halt to the contest
on Monday by telling the UK's Takeover Panel it would not
increase its December bid of 235 pence per share for the world's
largest private security company.
Allied on Tuesday said it would not increase the 245 pence
per share offer it announced on Dec. 8, making it the final bid.
G4S had backed that offer last year after repeatedly
rejecting GardaWorld's hostile advances, but low shareholder
acceptance forced repeated extensions to offer deadlines.
"G4S directors unanimously recommend that G4S shareholders
accept the final Allied Universal offer," The London-listed
company said.
Allied on Tuesday extended its offer deadline to March 16
and the acceptance condition was lowered to 75% from 90% in
nominal value and voting rights.
It has largely obtained the required antitrust regulatory
approvals in the United States and European Union, Allied
Universal added, though Britain has yet to approve the deal.
"The biggest issue now is probably the pension deficit in
the UK, which has constricted M&A deals in the recent past
involving G4S UK businesses," said Morningstar analyst Michael
Field.
G4S last year sold most of its cash-handling business to
rival Brinks Co but held on to the UK operations with
attached pension obligations.
In its offer document, Allied said it planned to evaluate
the possibility of exiting the prison business, where G4S has
faced problems in the past, and some other markets, such as
Iraq, Afghanistan, Sudan and Uganda.
"Allied will have to work with the pension trustees to come
to an arrangement if it wishes to divest anything here (in the
UK)," Field added.
Shares in G4S traded flat at 242 pence at 0855 GMT.
($1 = 0.7102 pounds)
(Reporting by Yadarisa Shabong in Bengaluru
Editing by Rashmi Aich and David Goodman
)
