But as Chris Godsmark, Business Correspondent reports, the government's review of rail regulation could hail the end of the rail leasing gravy train.
Royal Bank of Scotland won a closely fought auction battle for Angel yesterday, unveiling a pounds 395m deal to buy GRS, Angel's parent company. The bank said it could pay a further pounds 13m to cover contracts to build new trains.
The bulk of the cash will be shared by Mr Prideaux's private consultancy company, Prideaux & Associates, Nomura and Babcock & Brown, a California- based leasing consultancy.
Mr Prideaux, the outspoken former head of the Intercity empire who was ousted from his post in 1993 after damaging internal rows, will personally make pounds 15m from the deal. Two business associates, including Allen Thomas, a director of the Penna personnel group, will share a further pounds 7m out of the 5.5 per cent stake in GRS owned by Prideaux and Associates.
Normura will make pounds 334m, the bulk of the profits, from the sale through its 84.5 per cent stake in the company. Babcock & Brown will emerge with pounds 40m from its 10 per cent stake.
The deal is the latest triumph for the Japanese bank which has generated huge windfalls from its complex financing schemes. Since the acquisition of Angel in January last year Nomura has snapped up everything from the Ministry of Defence's housing stock to 4,000 Inntrepreneur pubs.
Nomura originally paid pounds 696m to the Government for GRS, but used the leasing contracts as security to refinance its borrowings. The move meant almost all of yesterday's cash price represented profit for the three investors, though Nomura refused to reveal how much, if anything, they had paid for their shareholdings. Mr Prideaux is thought to have been given his stake as a payment for a year's consultancy work.
Apart from the cash price, Royal Bank will take over more than pounds 600m of the securitised loans, putting a pounds 1bn price tag on Angel's assets. The company, which leases 3,700 carriages and locomotives to 18 of the 25 train operating groups, made pre-tax profits of pounds 75m in the year to March.
Previous winners from sale of rolling stock companies include Sandy Anderson, managing director of Porterbrook, who emerged with pounds 36m last year when Stagecoach bought the company for pounds 825m. In February directors of the Eversholt rolling stock company shared in a pounds 50m cash bonanza with their City venture capital backers.
Allegations that the companies were sold off too cheaply by the last Government are being investigated by the National Audit Office. Royal Bank said the issue was a matter for Nomura, though the Japanese group had taken a "substantial risk" when it bought into the company.
The government last night declined to comment on the windfalls. "Details of Mr Prideaux's remuneration are a matter for him and the new purchasers," said a spokeswoman for the Department of Transport.
But the Department confirmed that it was looking at the profits generated by rolling stock leasing contracts. The government's review of rail regulation has been widened to examine the three rolling stock companies.
The spokeswoman continued: "The Government's review of railway regulation includes the rolling stock leasing companies and is exploring ways of ensuring the market works more to the benefit of passengers in future."
Rail experts were surprised at the price paid by Royal Bank, which is believed to have outbid its arch rival, the Bank of Scotland, and a joint venture including NatWest. Another looming threat to leasing profits would come if the government changed the franchising regime when the first contracts expire in around five years' time.
Mr Prideaux's long term role at Angel was unclear last night. It emerged that he would lose his job as Angel chairman in the new year when Royal Bank took control. Iain Robertson, who led the deal for the Edinburgh- based banking group, said he "respected" the knowledge Mr Prideaux, who could not be contacted yesterday, had accumulated and hoped he would remain at the group. However the Bank said it would be appointing Ian Houston, one of its own executives to run Angel.
Mr Robertson said Royal Bank would not see similar windfalls from its purchase. "We'll be there for the long term. There's no one in this bank who has managed to make anything like that."
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