LONDON (Reuters Breakingviews) - GardaWorld’s pursuit of G4S has left it empty-handed. Five months after the Canadian group revealed its interest in the accident-prone UK security company, and at the start of a five-day auction overseen by London’s takeover regulator, Chief Executive Stephan Crétier has walked away. Rival Allied Universal’s 3.8 billion pound cash bid should allow it to capture a solid return. GardaWorld tried to take advantage of the Covid-19 selloff by pouncing on G4S with a hostile bid worth 190 pence per share in September. But the UK company resisted, aided by the intervention of U.S. rival Allied Universal. That proved too much for GardaWorld, which made an operating loss in the nine months to Oct. 31 last year and was already struggling with hefty debt. Crétier and his team’s 49% stake in the company may also have limited the scope to inject more capital. The result is that Allied snags G4S at an attractive price. Its bid of 245 pence per share implies an enterprise value of 5.4 billion pounds. Assume it can find cost savings equivalent to 4% of G4S’s revenue this year, which analysts estimate at 7 billion pounds, according to forecasts compiled by Refinitiv. Add those savings to the company’s expected operating profit of 447 million pounds, deduct tax at 25%, and Allied could earn a return of around 10% on its investment, comfortably above its 8.5% cost of capital as estimated by Redburn analysts. If Crétier had started with an offer closer to his final bid of 235 pence per share, he might have won the G4S board’s support. Instead he attacked the UK company for failing to engage meaningfully and accused it of misleading shareholders over its pensions scheme. The GardaWorld chief executive couldn’t resist a parting shot on Monday, complaining he wasn’t able to complete due diligence because of a lack of engagement from G4S, even though under UK takeover rules, the company sent the same information to both bidders. Crétier put a brave face on his defeat, saying there are better and less risky opportunities available. But in November he maintained that G4S was the only option for GardaWorld to become a global player. Swedish rival Securitas is one potential competitor, but its $5 billion-plus market value puts it out of reach. GardaWorld looks locked out. BREAKINGVIEWS Reuters Breakingviews is the world"s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.