Stagecoach gets back on the buses with £60m East London deal
Saturday 16 October 2010
The transport giant Stagecoach is re-entering the London bus market after buying back a business it sold in 2006 for a fraction of the price.
It will pay Macquarie £59.5m for East London Bus Group, the capital's third-largest bus operator, just four years after it sold the business to the Australian bank for £264m. At the time of the sale, Macquarie said the bus company was desirable for its predictable cash flow. But profits sank steadily and the company was sold as part of a "pre-pack" administration conducted by KPMG.
Brian Souter, the Stagecoach chief executive, said: "We operated a successful bus business in London for several years and are pleased to re-enter the London bus market at what we consider to be an attractive price."
Mr Souter said that while he recognised the challenge presented by the ailing East London Bus Group, he was relishing the chance to turn around a struggling business. His plan is to both improve the operational performance of the company and to cut its back-office costs through synergies with the parent group.
"Through our previous ownership of the business, we are familiar with the regulated London tender environment and have a track record of operating successfully and profitably in this market," Stagecoach said in a statement.
The £59.5m cost price, which will be funded from cash and Stagecoach's existing, undrawn bank facilities, includes the settlement of outstanding inter-company liabilities and East London Bus Group's £6.7m in cash held at the time of the sale.
East London Bus Group operates 1,400 buses from 10 depots across the capital and maintains a 15 per cent share of the market. For the year to April, it generated revenues of £254m, mostlyfrom a fixed-fee contract with Transport for London.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...