Arriva soars after foreign bid approach

ARRIVA, the bus and train operator, has received a £1.4bn takeover bid from Deutsche Bahn, the German state-run transport group.

Shares in the Sunderland-based company soared yesterday following the news of the 700p per share offer, rising by almost a fifth – their biggest jump for 15 years – eventually closing up 16.8 per cent at 677p.

Arriva said: “There can be no certainty that any offer will be forthcoming. A further announcement will be made when appropriate.”

Arriva has been looking for a tie up for some time and this latest approach comes just two weeks after Arriva ended early-stage talks with French state-owned SNCF over tie-ins with Keolis.

Earlier this month, Arriva reported pre-tax profits for 2009 plunged by around a fifth to £121.7m amid lower passenger numbers.

Arriva owns the CrossCountry intercity rail operator in the UK, runs trains in Wales and is a leader in the London bus market. It also has a number of operations in Europe including Denmark, Holland, Germany and Spain.

Deutsche Bahn owns a 50 per cent stake in the London Overground rail network, and is in talks with Eurotunnel about running trains through the Channel Tunnel.

Another company who is understood to be interested is Singapore’s ComfortDelGro, which operates London’s Metroline bus company.

A COLLECTION of banks have lined up to take roles advising Arriva on its potential takeover, with Royal Bank of Scotland (RBS), Deutsche Bank and Rothschild taking main roles.

Rothschild has been appointed as the main financial advisor to Arriva. The bank has landed roles on a number of recent transactions, including advising retailer Liberty’s, with Alex Midgen heading up the team at Rothschild.

Arriva has retained both RBS and Deutsche Bank as brokers on the deal, which is reported to have seen an advance made by Deutsche Bahn. The deal sent Arriva stocks soaring by 20 per cent, and the potential offer from the German company could see it valued at £1.2bn, or 700p per share.

UK corporate broking director Nick Adams took the role for RBS. Adams joined the bank last June from UBS where he was also a director of corporate UK broking.

Meanwhile, Toby Clark at Deutsche Bank took the role of main broker at the bank. Clark was part of a team advising on retailer New Look’s £650m flotation early last month.