FirstBus in pounds 54m takeover of London bus group

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The Independent Online
Some 2,000 employees in CentreWest, a London and Home Counties bus group, will share in a pounds 7m windfall after the group agreed a pounds 54m takeover deal with FirstBus, the rapidly expanding bus and railways group. The acquisition will also net around pounds 9.7m for four CentreWest directors, led by Peter Hendy, the managing director.

The payments, all to be made in FirstBus shares, represent a rapid return for the management team, which headed the pounds 25.6m buyout of the business when it was privatised in September 1994. The four put up around pounds 250,000 and will now share in 51 per cent of the pounds 19m being paid by FirstBus for the equity capital.

But Mr Hendy said last night the business then was not comparable to the group as it is today, which as well as the original bus services in west, central and south-east London, acquired the Berks Bucks Bus Company for pounds 7.65m last year and is a member of the consortium which won the bid for the pounds 200m Croydon tram project, where CentreWest is to be the operator. Profits, which were pounds 5.86m on turnover of pounds 44m in the year to March, have nearly tripled since privatisation. Pro forma sales, including acquisitions, are currently running at around pounds 60m.

Mr Hendy said he could not determine the individual payouts for staff until various issues were cleared up with the employee trust which holds the shares. Any share payments will effectively be gifts, as staff paid nothing for their holdings. "One of the things I always wanted [at the time of the buyout] was that the employees should get equity regardless of whether they had money or not."

He described himself as "one of the few people in the bus industry who have done it to stay in it". He added that one of the conditions of a sale was that it had to be to someone who wanted to keep on running the business.

Shares in FirstBus gained 5.5p to 240p yesterday, despite a statement from the Office of Fair Trading that it was considering whether to refer the bid to the Monopolies and Mergers Commission.

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