Stagecoach scraps buyout

Stagecoach has scrapped plans to buy a small local bus business from its rival operator FirstGroup after the Office of Fair Trading referred the deal to the competition regulator.

"We are extremely disappointed at the decision to refer what is a relatively small transaction to the Competition Commission," a spokesman for Stagecoach said yesterday. "We do not believe we can justify spending further money and management time on what has already been a lengthy process."

The decision by the consumer watchdog to refer the bid, announced yesterday, comes after the bus industry was singled out for its lack of competition in a report last year. The OFT said it believed the deal would reduce competition in local bus services in north Devon.