Go-Ahead shares soar to highest level in over two years with two Aussie firms in a bidding war for the transport group
Shares in Go-Ahead surged to their highest level in more than two years as it became the subject of a bidding war.
The Newcastle-based transport group, which runs London’s red buses, accepted a £648million offer from a consortium comprised of Australian group Kinetic and Spanish outfit Globalvia Inversiones on Monday.
But yesterday Kelsian, another Australian transport and tourism group, said it was still in talks about tabling a bid for Go-Ahead.
Go-Ahead accepted a £648m offer from Australian group Kinetic and Spanish outfit Globalvia Inversiones. But Australian firm Kelsian said it was still in talks about tabling a rival bid
Shares in Go-Ahead shot up 16.2 per cent, or 220p, to 1580p as the two Australian suitors went head-to-head.
The battle for Go-Ahead comes amid heightened interest in British transport groups from foreign buyers in the wake of the pandemic.
Rival First Group recently turned down a £1.2billion offer from US private equity while Stagecoach fell to German asset manager DWS for £595million March.
Kelsian will need to top the 1500p per share offer from the Kinetic consortium that was accepted by Go-Ahead’s board on Monday.
The bid is a 49 per cent premium to the company’s share price on May 25, the day before an approach for First Group from US private equity shark I Squared Capital sparked a flurry of takeover speculation in the sector.
Commenting on the consortium deal, Kinetic co-chief executive Michael Sewards told the Daily Mail if the takeover succeeded, Go-Ahead’s UK-based board, its chairman Clare Hollingsworth and chief executive Christian Schreyer would stay on. ‘We know this management team very well – we hold them in high regard,’ Sewards said.
The £648million bid for Go-Ahead will trigger a hefty payday for former boss David Brown, who left late last year. He will pocket £1.3million from his remaining shares.
Diana Ballinger, the multi-millionaire widow of Martin Ballinger – who led the 1987 buy-out of Go-Ahead, then named Northern General – will receive a £22.4million windfall through her 3.5 per cent stake in the group.
Go-Ahead’s imminent capitulation to a takeover offer makes it the latest company to be sold since the pandemic began.
Others have included Morrisons, Asda and G4S – leading to accusations of ‘pandemic plundering’ as the share prices of companies slid during Covid.
In April, fund manager Schroders warned that the UK economy could be a big loser from the steady loss of companies to foreign buyers.
But Sewards stressed that if the takeover was successful Go-Ahead’s headquarters in Newcastle and its London office would remain open.
Meanwhile bus and train operator First Group has reported an increase in profits amid cost reductions and a recovery in passenger numbers.
In an update a week after the company rejected a £1.2billion takeover proposal from American suitor I Squared Capital Advisors, First said profits edged up to £226.8million for the year to March 26.
Revenues fell to £5.58billion from £6.84billion after disposals including the sale of its US Greyhound coach business. Current trading was ‘in line with our expectations’, the firm said.