Exclusive: Go-Ahead’s buyers not afraid of bidding war with Kelsian
The Australian-Spanish consortium that has made an offer of around £650m for Go-Ahead said it’s not worried about a war with the group’s other bidder, tour operator Kelsian.
“Our offer presents a very strong premium,” said Michael Sewards, the chief executive of one of the consortium’s two partners, Australian bus operator Kinetic.
“We think now more than ever that presents a very very compelling case and we’re confident it will be approved.”
Made yesterday afternoon, the 1,450p per share full-cash offer represents a premium of 48.5 per cent to Go-Ahead’s closing price on 25 May as well as a 77.6 per cent increase on the group’s average price for the period ended 10 June.
The bid was accepted by the UK group’s board, who considered it “fair and reasonable” and recommended it to shareholders.
The joint venture – made up by Kinetic and Spanish road infrastructure group Globalvia – has long been interested in Go-Ahead.
“This has been a number one target as it is our absolutely preferred business in the UK and has been for some time,” the chief executive told City PM this morning.
According to Sewards, Go-Ahead is a “great business” with a “great brand” that has built a very good presence across both the UK and abroad.
“It’s arguably one of the leaders in transitioning to zero-emission and decarbonisation, and that’s highly attractive to us,” he added.
The Australian-Spanish group was not put off by Go-Ahead’s recent financial troubles.
“We’ve been operating for 44 years and we’ve seen many movements in the market,” Sewards explained. “This particular business has a very very strong long-term future.”
Over the last few months, Go-Ahead had been under scrutiny for a series of financial irregularities, including being forced to pay a £23.5m fine after it was stripped of its Southeastern franchise for concealing £25m of taxpayer’s money related to HS1.
The group recovered from the challenging period in April when it announced it would reinstate pre-Covid dividends to shareholders.
Talking about the future, Kinetic’s boss said the consortium was focused on delivering further growth in both the UK and other markets and was not planning any cuts.
“We are looking to retain the existing business as a standalone business, with all team members to be retained as well as the chair and chief executive,” Sewards continued.
“We think [our approach] provides a lot of security for the people in the business but also for the suppliers and manufacturers who provide services to Go-Ahead.”
Following the announcement, Go-Ahead’s shares rocketed by 14 per cent, City PM has reported.