G4S's largest investor said it valued the business "significantly higher" than the £3bn being offered by GardaWorld, the Canadian rival that has made three approaches for the UK-listed security business.
Harris Associates's chief investment officer David Herro, who controls a near-10pc stake in G4S, has described the FTSE 250 company as being in a "very good spot", signalling that GardaWorld will have to return with a better proposal.
Failing to win the support of Harris, which runs more than $80bn of assets, increases the chances of GardaWorld going hostile in its efforts to buy G4S, as the rhetoric between the two security companies escalated.
On Monday GardaWorld went public about its three approaches to G4S management, culminating in a 190p-a-share all-cash offer which is being bankrolled by BC Partners, the private equity firm which owns half of GardaWorld.
GardaWorld said its approaches - the most recent of which represented a 30pc premium - were “summarily dismissed or ignored” by the FTSE 250 business which did not engage with it.
G4S hit back, calling the offers “highly opportunistic” because of the hit delivered by coronavirus and “significantly undervaluing” the business.
The British-based company intensified their criticism on Tuesday, rebuffing claims it did not engage, saying chairman John Connolly explained to his opposite number at BC Partners why the approaches did not fully value G4S.
It also said G4S has “significantly reshaped” its portfolio over recent years, positioning it to “deliver growth, profitability and substantial free cash flow”.
GardaWorld has since upped the ante, labelling G4S’s response “desperately disappointing stuff”.
A spokesman for the Canadian business added: “The G4S leadership team has presided over a catastrophic loss of faith and reputation and yet they still talk of an ‘attractive brand’ and ‘stakeholder relationships built on trust and a track record of service excellence.’
“After seven years, management’s ‘turnaround’ strategy is still only at ‘an inflexion point.’ What have they been doing all this time? The stark truth is that G4S has missed key targets for five of the last six years.
“G4S’s shareholders would be better served by their board’s immediate engagement with us.”
GardaWorld’s appeal to investors to drive G4S management to the negotiating table has increased the likelihood of a formal bid, if one is made, being hostile, and has sent shares in the company soaring.
News of the approaches sent G4S's price up by more than a quarter on Monday and closed down a touch at 181p on Tuesday.
There is also growing speculation that a hostile takeover attempt of G4S could flush out other potential bidders, eager to take on the company's stable and long-term state contracts.
Andrew Brooke, analyst at RBS, said: “We believe that other [private equity] parties will run the rule over G4S, as it is effectively now in play, whilst we also believe there would be some logic to a deal with Allied Universal. Hence we would not rule out other parties entering the fray.”