Small band nets millions on Stagecoach

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The Independent Online
A small band of rail managers and City investors were last night set to make a killing by selling off 35 million shares in Stagecoach worth pounds 270m which they acquired when it bought the Porterbrook train leasing company last summer.

The sale of the 14.7 per cent shareholding in Stagecoach will crystallise windfall profits running into tens of millions of pounds for the Porterbrook management and senior executives at Charterhouse Bank, led by chairman Victor Blank.

News of the huge share placing caused Stagecoach's share price to slump 21.5p to 778p. But that is still 250p above their level at the time the Porterbrook takeover was unveiled in late July.

Porterbrook's management, led by former British Rail terminal manager Sandy Anderson, and Charterhouse paid the Government pounds 75m for the equity in the business a year ago and them sold it on to Stagecoach for a pounds 400m profit.

Mr Anderson, who is estimated to have paid pounds 150,000 for his original stake in Porterbrook, was last night sitting on shares worth pounds 28.5m in addition to the pounds 16.7m in cash he has already raised from the deal with Stagecoach.

Mr Blank and four other Charterhouse directors, Edward Cox, chairman of Charterhouse Development Capital, Gordon Bonnyman, its managing director, Geoffery Arbuthnott and Duncan Aldred, are estimated to have put up just pounds 90,000 of their own money for a stake worth pounds 12m. They will share in a further pounds 25m profit made by Charterhouse Development Capital on the sale.

Under the terms of the Stagecoach deal, the Porterbrook management, Charterhouse and funds managed by it received 43.75 million Stagecoach shares in part- payment. A six month lock-in deal should have prevented them from disposing of shares until 28 February. But yesterday Stagecoach said it had agreed to release them early from the undertaking, allowing them to sell 35 million shares through a book-building exercise run by the company's brokers, UBS.

At last night's closing price of 778p, the shares being tendered were worth pounds 272m.

A spokesman for Stagecoach said that the bulk of the shares being tendered were those owned directly by Charterhouse or on behalf of funds it manages. It is thought that the management of Porterbrook will sell about 2 million of the 8 million Stagecoach shares they received.

The rapid rise in Stagecoach's share price since it completed the pounds 825m acquisition of Porterbrook has increased the size of the windfalls netted by the individual directors. Mr Anderson's stake is now worth pounds 45m, the finance director Ray Cork is sitting on pounds 21m and engineering director Tim Gilbert's stake is worth pounds 13.5m.

The Porterbrook chairman, Dr Peter Watson, has a stake worth pounds 5.4m. The two Charterhouse directors shown in public documents as having held shares in Porterbrook, Mr Arbuthnott and Mr Aldred, have holdings in Stagecoach worth pounds 624,000 and pounds 416,000.