Coach firm near buyout

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The Independent Online
Shearings, the coach holiday business owned by the Rank Organisation, is on the verge of being sold to its management - despite the fact that its bid, thought to be around pounds 75m, is not the highest that Rank's adviser, Schroders, has received.

The preferred bid is being led by former Rank director Angus Crichton- Miller and Shearings' managing director John Slatcher, who has run the business for the past six years.

Shearings sells 400,000 coach holidays a year, and runs a fleet of 320 coaches. It also owns 33 hotels. Last year, the company recorded profits of pounds 8m on a turnover of pounds 100m.

"Shearings has undergone a radical cost-cutting programme over the past six years," said Mr Slatcher. "Now it requires some development. The company needs to take the Shearings name and do something with it."

Mr Slatcher declined to answer questions about the management's bid, citing contractual obligations to Rank. However, it is understood that one of the main planks of the deal is that the 1,100 full-time employees of Shearings will have the opportunity to buy up to 20 per cent of the equity in the new company.

Around three-quarters of the staff have so far expressed an interest in becoming shareholders. The deal will not allow Shearings' 1,400 seasonal workers to buy shares.

According to Rank, the final decision has not yet been taken on who will get the business. A rival bid from Legal & General Ventures, which would involve installing a new management team, is also on the table. It is thought to value the company at closer to pounds 80m.

Shearings' management has pitched the deal to Rank as the most convenient way of disposing of the business without undergoing long due diligence, which might bring down the price of any outside bid.

Rank executives, having initially preferred a trade buyer, are now believed to be coming round to the attractions of a management buyout after predicted bids from rival bus and holiday companies failed to materialise.

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