[ad_1]
(Repeat Wednesday's story without modifying the text)
By Pamela Barbaglia, Arno Schuetze and Harry Brumpton
LONDON / FRANKFURT / NEW YORK, June 5 (Reuters) – US buyout funds Carlyle and German badet manager DWS are preparing to bid on the UK railway and bus company Arriva after talks preliminary talks with its German owner Deutsche Bahn, sources close to the case told Reuters.
An auction process led by Deutsche Bank and Citi is expected to begin in mid-June, according to four sources, rating the Sunderland-based business at around 3.5 billion euros ($ 3.94 billion).
Deutsche Bahn, which bought Arriva in 2010, needs to free up cash to reduce debt and boost growth.
The German company considers the sale of Arriva as its top priority, but it could also pursue an initial public offering (IPO) to maximize its price, sources said.
The American private equity firm Apollo and the French unit of the SNCF, Keolis, are also making efforts to make competing offers on Arriva, said these sources.
Deutsche Bahn wants to receive indicative offers before the summer break in order to start exclusive discussions with a preferred bidder in late September or early October, said one of the sources.
Alexander Doll, a member of the Deutsche Bahn Executive Board for Finance, Freight Transport and Logistics, confirmed in a statement that Deutsche Bahn had embarked on a two-way process to explore the possibility of selling up to 100 % of Arriva shares to one or more investors, as well as the possibility of continuing an IPO.
"The process started well, with many parties expressing interest," he said. "As the two-way process continues in the coming months, we expect more informed feedback."
DWS plans to bid as part of a consortium and is currently seeking other financial investors, said one of the sources.
DWS and Keolis refused to comment. Apollo and Carlyle were not immediately available for comment.
Arriva, which employs 53,000 people throughout Europe, operates British railway concessions, including Northern and London Overground, as well as buses across the country.
It generated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 575 million euros in 2018 for a turnover of 5.44 billion euros.
British companies Go-Ahead, Stagecoach and National Express trade between 3.5 and 7.5 times their respective main profits.
Deutsche Bahn, whose net debt rose to 19.5 billion euros at the end of 2018, aims to cash up to 4.5 billion euros. euros, said one of the sources.
However, interested parties have a more cautious approach to its valuation and value badets between 3 billion and 3.5 billion euros, sources said.
Deutsche Bahn has begun this year a strategic review of its business against the growing pressure to close the funding gap.
Arriva consists of three units – a British railway division, a European railway unit and bus operations throughout Europe – and although Go-Ahead, Stagecoach and National Express may attempt to bid for specific badets, the Deutsche Bahn wants to market them. as a business and is against an ad hoc deal.
Arriva's European rail activities compete with Netinera, the German railway subsidiary of Italy's Ferrovie dello Stato, which is currently seeking a new investor.
The investment company Cube bought 49% of Netinera from Arriva in 2011 and is transferring it to another investor, with bids expected by mid-June, while Ferrovie wants to retain its majority stake. ($ 1 = 0.8889 euros) (Report by Pamela Barbaglia, Arno Schuetze and Harry Brumpton, additional report by Markus Wacket in Berlin, edition of Jan Harvey and Susan Fenton)
Source link
