According to Securitas president and chief executive officer Thomas Berglund, the two parties could not agree on a price for the deal.
Talks between the two groups have been ongoing for the past 18 months, but a Reuters story posted on the Internet on the weekend of 18-19 May pushed Chubb shares way beyond the price Securitas wanted to pay.
A Securitas source close to the deal told SMT: "There was too much trading in Chubb, the volumes were very high and we felt as though we were being bounced into a transaction." The news has now pushed shares in Stockholm-based Securitas up by 5.1%, at the same time forcing Chubb shares downwards by more than 13%.
Securitas had already begun due diligence accounting checks on the deal, although plans for an equity offering for finance had been in the very early stages.
Thomas Berglund added: "Although there are obvious synergies between the two companies we have not been able to reach an agreement that's financially attractive to all."
Berglund stressed that his company is "not interested" in making a hostile bid for Chubb, but is adamant that Securitas is still on the hunt for a British alarm systems group.
Although Securitas has long boasted an active acquisition programme, Berglund told SMT that it was now of more importance to focus on organic growth than simply make a quick deal. "Our business is running very smoothly at present, and organic growth is our top priority," he said. In the first quarter of 2002, Securitas increased sales by 29% (10% of which was accounted for by organic development).
Chubb is in a healthy position at the present time. It's latest financial results – published in March and covering the previous 12 months – show sales up 9% at £1,500.6 million.
Operating profits have also risen to £150.3 million (an increase of 8%), while cash flow from operations has doubled to £154.6 million.
Source
SMT
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