THE board of British-based transport group GoAhead has announced it is recommending a cash offer of £647.7m for the company from a consortium of industry investors made up of Australian-based bus operator Kinetic, which is partly owned by Canada’s Ontario Public Service Employees Union, and Spanish road and rail infrastructure developer and concession manager Globalvia Inversiones, which manages and operates around 80km of light rail plus metro routes in several major Spanish cities.
The consortium is operating via a new company created for the transaction - Gerrard Investment Bidco - and has offered to purchase all GoAhead shares at £14.50. This is a 77.6% premium on the prevailing share price over a weighted three-month period since mid-March and a 24% premium on the closing price prior to the announcement on June 12. GoAhead’s shares have suffered in recent months following a two-month suspension from trade on the London Stock Exchange after the company acknowledged overcharging Britain’s Department for Transport for rail contracts.
GoAhead shareholders will also receive a special dividend of £0.50 per share, bringing the total payment to £15 per share. “This is a compelling offer which combines an attractive valuation for shareholders with bright prospects for Go-Ahead’s operations and colleagues around the world,” says Mr Christian Schreyer, GoAhead CEO.
“We have confidence in Go-Ahead’s future as an independent business, but see that being part of a truly global mass transit platform will yield exciting opportunities. We welcome the commitment of Kinetic and Globalvia to invest in the decarbonisation and digitalisation of our operations, and to support our strategy, The Next Billion Journeys.”
GoAhead said on June 12 it had received bids from Australian group Kelsian and the successful consortium before this announcement, pushing its shares higher. Kelsian hasn’t ruled out making a rival bid, stating on June 14 that it is continuing to “carefully assess the opportunity,” and urging the British firm’s shareholders not to take any action.
GoAhead is a major bus and rail operator in Britain via its subsidiary Govia. It runs the GTR network comprising Thameslink, Southern, Gatwick Express and Great Northern under a management contract recently awarded by the British government. The company has also been active in the German regional rail market since 2019, initially around Stuttgart and since December 2021 in Bavaria, where a second contract begins this December. GoAhead is also the operator of a rail concession contract in Norway.
GoAhead announced a new strategy in April, which focuses on bus operation while identifying light rail and metro operation as potential new business activities. The prospective new owners are therefore both well placed to deliver the strategy.
The scramble for GoAhead is indicative of a current trend in the British public transport market. DWS Infrastructure agreed to acquire bus operator Stagecoach Group in March, after outbidding National Express. First Group also rejected a takeover approach from private equity operator I Squared Capital earlier this month.
