The FTSE 100 security group G4S is set to replace its roster of corporate advisers and brokers this week as punishment for the embarrassing failure to buy the Danish cleaner ISS.
The chairman, Alf Duch-Pederson, this month announced that he is to quit after the £5.2bn proposal, which would have made G4S the world's biggest cleaning and security group with 1.2 million employees, failed to get shareholder support in November. However, the G4S board believes that it can only regain credibility by also axing some of the advisers on that deal.
Bank of America Merrill Lynch, JP Morgan, Jefferies and Citi will be among the firms pitching for highly lucrative broking and advisory roles next week. "Pretty much every bank in London will want to get on board with G4S," said one broker. "They're going to re-evaluate everything."
The existing brokers are Hoare Govett and Deutsche. Hoare Govett is unlikely to try to retain its position, given that its owner, Royal Bank of Scotland, is attempting to offload the firm. However, this will mean that Hoare Govett, one of the historic names in stockbroking, will be left with just seven FTSE 100 clients.
Deutsche, which is also a corporate adviser to G4S, is likely to make a case for its retention in both roles. The company's other adviser, Greenhill, is also expected to defend its position during this week's beauty parade.
G4S, which is providing security at London Olympics, has admitted that shareholders had been scared off by the size of the ISS deal. The board was looking to partly fund the move through a hugely discounted rights issue, which would have diluted the stakes of those shareholders not willing to cough up such vast amounts of cash.
Nick Buckles, who expressed his "regret" at the deal's collapse last year, has decided to focus on buying smaller companies. This would mean that G4S is unlikely to spend more than about £300m a year on takeovers.
Several investors blamed Mr Duch-Pederson for attempting to force through a deal at a volatile time for the economy.
In a statement earlier this month, the senior independent director, Lord Condon, said: "On reaching 65, and following the board's decision to terminate negotiations regarding the ISS acquisition, Alf Duch-Pedersen has informed the board of his intention to retire this year and we have reluctantly accepted his decision."Reuse content