Takeover nets bus workers pounds 35,000
Capital gains: Employee-owners, from scientists to drivers, reap rich rewards from sale of shares
Friday 10 May 1996
Employee-owned Strathclyde Buses, which operates a fleet of almost 1,300 vehicles in the Glasgow area covering a population of 1.7 million, is being sold to FirstBus, Britain's second biggest bus company, for up to pounds 110m.
"I'm obviously delighted for our members," said Des Divers, a convenor for the Transport & General Workers' Union in Scotland and himself one of the lucky employee shareholders.
"pounds 35,000 less tax isn't going to last forever, but I dare say many of the staff will be taking a well-earned holiday."
Not all the bus drivers, however, will be rushing to the travel agents to book two weeks on the Algarve. About 1,400 of them will miss out on the bonanza because they failed to invest pounds 300 when Strathclyde Buses was privatised three years ago.
The FirstBus deal represents an 11,700 per cent return on that original investment - the sort of payback that highly-paid investment bankers and share traders in the City can only dream about.
Staff bought 6,000 shares at 5p each when the bus company was sold by Strathclyde Regional Council in 1993. The FirstBus offer now values those same shares at a 585p, including a special dividend payment.
"We see it more as a payback than a windfall," Mr Divers continued. "British bus workers have suffered a lot in the last 10 years. We didn't go into privatisation to make money, we were forced into it through de-regulation. With this deal we have guaranteed our pensions and long-term job security."
Mr Divers said the union would be recommending the deal to its members, who own almost two-thirds of the bus company.
The Glasgow bus drivers' joy may not be shared by passengers in the city, however. FirstBus yesterday indicated it would be putting up fares. "They will probably have to move, but not by much above the rate of inflation," admitted FirstBus chief executive, Moir Lockhead.
The deal could also run into regulatory problems as FirstBus now has an estimated 50 per cent of the Scottish bus market.
"They will be running buses bumper-to-bumper from Paisley to Berwick- on-Tweed," claimed Brian Souter, chairman of Stagecoach, Britain's biggest bus operator.
Mr Souter, who is standing down as a director of Strathclyde Buses, admitted Stagecoach had also been interested in bidding but decided instead to sell its 20 per cent stake to FirstBus at a pounds 15.6m profit.
The Strathclyde deal is the latest in a series of Lottery-like scoops for bus drivers across the country who had the foresight to buy shares when their companies were privatised.
Staff at GM Buses South in Manchester each became pounds 10,000 better off after Stagecoach bought their company earlier this year. But that was small beer compared to the pounds 38,000 some Birmingham bus drivers made last year when West Midland Travel fell to National Express for pounds 244m.
FirstBus was created last summer by the merger of Bristol-based Badgerline and Grampian Regional Transport of Aberdeen. It has expanded rapidly through a string of acquisitions and recently increased its share of the national bus market to 16 per cent by paying pounds 52m for bus companies in Manchester and Portsmouth.
FirstBus also owns a 24.5 per cent stake in Great West Trains, which runs rail services out of Paddington in London, and plans to bid for more rail franchises as they become available.
Investment Column, page 20
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Louis van Gaal gets tough with Manchester United players, with Darren Fletcher and Luke Shaw berated in public and Phil Jones left looking bemused
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Peaches Geldof inquest: Tragic final moments of socialite's life reveal she "lied" to husband about failed drugs tests
Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she "lied" to husband about failed drugs tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£30000 - £40000 Per Annum + excellent benefits: Clearwater People Solutions Lt...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
Excellent Salary: Austen Lloyd: Senior Private Client Solicitor - We are makin...
£50000 per annum + benefits: Progressive Recruitment: A unique and rare opport...