Hostile bidder GardaWorld had called a halt to the contest on Monday by telling the UK's Takeover Panel it would not increase its December bid of 235 pence per share for the world's largest private security company.

Allied on Tuesday said it would not increase the 245 pence per share offer it announced on Dec. 8, making it the final bid.

G4S had backed that offer last year after repeatedly rejecting GardaWorld's hostile advances, but low shareholder acceptance forced repeated extensions to offer deadlines.

"G4S directors unanimously recommend that G4S shareholders accept the final Allied Universal offer," The London-listed company said.

Allied on Tuesday extended its offer deadline to March 16 and the acceptance condition was lowered to 75% from 90% in nominal value and voting rights.

It has largely obtained the required antitrust regulatory approvals in the United States and European Union (EU), Allied Universal added. The deal does not require approval from Britain since the EU clearance was obtained before the Brexit deadline.

"The biggest issue now is probably the pension deficit in the UK, which has constricted M&A deals in the recent past involving G4S UK businesses," said Morningstar analyst Michael Field.

G4S last year sold most of its cash-handling business to rival Brinks Co but held on to the UK operations with attached pension obligations.

In its offer document, Allied said it planned to evaluate the possibility of exiting the prison business, where G4S has faced problems in the past, and some other markets, such as Iraq, Afghanistan, Sudan and Uganda.

"Allied will have to work with the pension trustees to come to an arrangement if it wishes to divest anything here (in the UK)," Field added.

Shares in G4S traded flat at 242 pence at 0855 GMT.

(This story corrects to say deal does not require UK approval in paragraph 7)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and David Goodman)

By Yadarisa Shabong