The planned sale of the Go-Ahead Group to a consortium made up of Australasian bus operator Kinetic Group (51%) and Spanish multinational transport infrastructure concession manager Globalvia (49%) was completed on 10 October.
The deal amounts to a rescue of Go Ahead after financial and accounting irregularities including the stripping of its SouthEastern Rail Franchise last year after failing to declare £25m in Government support.
In January, its shares were briefly suspended because it failed to publish its results on time. As well as the scandal at Southeastern - which saw a big drop in revenue from loss of the franchise, other franchise situations and onerous contract provisions in Germany added to the financial confusion. A new management team, was brought in.
In its half-year results earlier this year, those for 2021 were radically restated, with pre-tax profit pushed up by £26mn, and net assets down by £52mn, plus a raft of adjustments
The sale deal values Go-Ahead at around £669m. Under the consortium’s finalised offer, each shareholder is entitled to 1,550p per share, made up of 1,450p in cash and a 100p “special dividend.” Approval of the purchase was gained from Go-Ahead shareholders in August and sanctioned by the High Court on 6 October.
Go-Ahead Group chief executive Christian Schreyer described it as “compelling.” Kinetic Co-CEO Michael Sewards added then that the majority purchaser planned to provide long-term capital and expertise “to facilitate the rapid transition of Go-Ahead’s bus fleet from diesel to zero-emission technology.”
Both consortium members say that they are “strongly convinced of the strength of Go-Ahead’s operations and the markets in which [it] operates and are positive about the long-term opportunities available to the Go-Ahead business.” Kinetic and Globalvia formed subsidiary Gerrard Investment Bidco to undertake the purchase.
They say they see opportunities for Go-Ahead to “increase its footprint in the regional UK bus market,” both by leveraging Kinetic and Globalvia’s experience in collaborating with local authorities to enhance networks and via “strategic” merger and acquisition.
Schreyer remains part of the Go-Ahead board alongside chair Claire Hollingsworth, non-executive director Dominic Lavelle and group chief Financial Officer Sarah Mussenden. Three other board members stepped down upon completion of the sale.
Kinetic runs around 4,000 buses in Australia and New Zealand and has expanded its operations there in 2022. Globalvia operates and maintains 26 infrastructure projects.
Australian company Kelsian Group – which owns Tower Transit – had also indicated its interest in purchasing Go-Ahead, but pulled out in July.
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