A rare head-to-head auction for G4S, the world’s biggest security firm, came to an abrupt halt without a shot being fired.

In a move that took the City by surprise, Canada's GardaWorld said it would not increase its 235p-a-share offer.

G4S shares plunged 10pc, leaving those investors who thought a series of offers would value the firm in excess of £4bn nursing heavy losses.

Gardaworld founder Stephan Crétier said: “There can be no better owner for G4S than GardaWorld, but we are disciplined buyers ... we have concluded that priced above 235p-per-share, there are better and less risky opportunities.”

GardaWorld’s decision to go “final” on the first day of what was expected to be a five-day auction, leaves US rival Allied Universal in pole position to acquire G4S.

The approach from Allied, whose 245p-a-share offer was recommended by G4S’s board in December, will still need to be approved by shareholders.

What effectively amounts to the Canadian firm pulling out of the running, brings down the curtain on a hostile pursuit that has baffled onlookers.

Mr Crétier and G4S chairman John Connolly clashed on a number of occasions last year as the Canadian businessman criticised the UK firm to justify a lower offer.

In October he claimed that G4S was “deeply troubled” and still grappling with “scandals” that could have legal implications.

Mr Connolly rejected said claims that G4S “dogged with scandals is a very significant over-exaggeration” and accused GardaWorld of not being able to “put together a credible bid for the company”.

On Monday Mr Crétier said: “GardaWorld has the skills, expertise and ambition to take on the challenges that G4S faces. We understand the people-oriented nature of our industry, we have a deep understanding of complex operating environments and a successful track record of profitably growing businesses.

“But a successful integration of G4S, a 530,000-employee platform operating in 85 countries will require sizable resources; addressing its issues will require greater investment.”

US competition regulators have cleared Allied to acquire G4S. Together the two firms would control about a third of the American security market. Other authorities across the Atlantic could yet probe the deal, however.

Meanwhile, UK officials have been tracking progress. As one of the Government’s strategic suppliers, G4S runs facilities such as prisons and immigration centres.

It also play a crucial role in the UK’s Covid response - for instance, chaperoning arrivals from "red list" countries from airports to hotels where they must remain in quarantine for 10 days.

The Takeover Panel, the City’s M&A referee, was primed for a busy week. The head-to-head auction was the first since 2018 when Comcast bought Sky for £30bn.