Staff drive off with £13,400 windfalls as Arriva buys MTL

More than 2,000 bus drivers received windfalls averaging £13,400 yesterday after Arriva, the fast-growing bus company, bought MTL, the heavily indebted Merseyside bus and train operator, in an £85m deal.

More than 2,000 bus drivers received windfalls averaging £13,400 yesterday after Arriva, the fast-growing bus company, bought MTL, the heavily indebted Merseyside bus and train operator, in an £85m deal.

The transaction marks the first takeover of a privatised train operator and is expected to be followed by further consolidation within the industry.

The North-east based Arriva is paying £34.7m in cash for MTL and taking on a further £50m of debt within the business.

MTL was formed in 1992 following the buyout of Merseyside's publicly owned bus services and is 80 per cent employee-owned. The bus business, bought for less than £1m, now makes profits of £12m a year, enabling MTL to return £48m to shareholders in December, 1998.

But MTL ran into financial difficulties after taking over two rail franchises - Merseyrail and Northern Spirit, which serves north-east England. Falling public subsidies and lower than expected passenger revenues resulted in significant losses at Northern Spirit.

Arriva has agreed to continue operating the two rail franchises for a further 12 months, after which they will be re-let by the Strategic Rail Authority.

It has applied to bid for the Chiltern Trains franchise, which operates services from Paddington, but has not decided whether to bid for the two MTL services.

Arriva shares closed unchanged yesterday at 198.25p