DWS Infrastructure has progressed its bid to purchase Stagecoach with the acquisition of 16.99% of the Perth group’s issued ordinary share capital from Threadneedle Asset Management. DWS has paid 105p per share, in accordance with its final offer for Stagecoach.
In addition, DWS has received an irrevocable undertaking to accept its offer from Stagecoach co-founder Dame Ann Gloag in respect of her approximately 10.5% holding. That is binding even if a higher competing bid for the business is made. Other shareholders in Stagecoach have until 21 May to decide whether to accept the offer from DWS.
Stagecoach’s board previously recommended that they do so. That represented a U-turn on its previous recommendation to accept an earlier offer from National Express (NX). Such a change of tack drew the ire of NX, which has claimed that the DWS Infrastructure offer “materially undervalues” Stagecoach.
However, DWS claims that its bid will bring “greater certainty” for Stagecoach staff. It involves the retention of Chief Executive Martin Griffiths, Finance Director Ross Paterson and UK Managing Director Carla Stockton-Jones. Head office functions and related roles in London, Perth and Stockport will also remain, although certain central support functions may no longer be needed.
DWS adds that it “has a strong conviction about the UK bus market opportunity on the back of the introduction of Enhanced Partnerships and potential franchising agreements.” The purchaser says that it “will support Stagecoach’s management in accessing capital to deliver its decarbonisation objectives.”
That will see an acceleration of investment in zero-emission stock “to enable it to become the leading zero-emission bus operator in the UK.” Defining the pathway to that will form part of a business review that DWS plans to undertake when and if the deal completes. Such work will also encompass “expanding the geographic footprint of the business… on a region-by-region basis across the UK.”
