G4S plc (LON:GFS) (OTCMKTS:GFSZY), the world’s largest security service firm, has turned down the $2.5 billion offer from British private equity group Charterhouse Capital Partners for its cash transportation business, according to a report from Reuters.G4S

The security company said in a statement that the offer from Charterhouse Capital was “highly opportunistic,” and undervalued the unit.

Offer undervalued the unit

G4S plc (LON:GFS) (OTCMKTS:GFSZY) said that the cash transportation segment is vital to the company. At present, the company has 620,000 employees in 120 countries and provides various security services like managing prisons and immigration centers, safeguarding tennis players at Wimbledon, and so on.

The cash transportation segment contributed 18% of the total 7.3 billion turnover of the company last year.

“We think G4S was right to reject the bid, on both valuation and strategic grounds,” JP Morgan analysts reported to Reuters. Additionally, according to the analysts, the offer by the British equity firm valued the segment at 7.1 times enterprise value EBITA including the company’s debt, which compared to 12.1 times valuation of the whole group in 2013.

According to Panmure Gordon analyst Mike Allen, cash handling is an established business, but could not perform according to its potential in recent years due to low interest.

G4S trying to mend relationships with British government

G4S is trying to bring its spoiled relationship with the British government, which is its biggest client, back on track after various gaffes including its failure to deploy the required number of security guards for the 2012 London Olympic Games.

In July, the British government withdrew all its contracts from G4S when the fact came to light that G4S and rival Serco were accused of tagging criminals who were dead or in prison. The chief executive of G4S’ U.K. and Ireland business departed from the company last week.

Cevian Capital might not be happy now

A week back, Bloomberg reported that Charterhouse Capital Partners is in the process of finalizing a deal with G4S to acquire its cash transportation unit. Cevian Capital, a Sweden-based activist hedge fund which holds 5.1% share in G4S plc (LON:GFS) (OTCMKTS:GFSZY), could have benefited from the deal as it wanted G4S to divest part of its loss-making business. Carl Icahn is also an investor in Cevian Capital, and the strategy of the company to enforce firms to make changes into their business may have been inspired by the style of the activist investor.

In August, G4S plc (LON:GFS) (OTCMKTS:GFSZY) sold off its Canadian cash service business to Garda World, for $105 million, and its Columbian cash service business was sold to Iron Mountain Incorporated for $59 million.