FirstGroup, the Aberdeen-headquartered transport giant, was reported to be considering a move into Spain by bidding for one of the country's leading bus and coach companies.

FirstGroup, the Aberdeen-headquartered transport giant, was reported to be considering a move into Spain by bidding for one of the country's leading bus and coach companies.

Cinco Dias, the Spanish newspaper, said FirstGroup was weighing up a cash-and-shares bid for Continental Auto, which has been put on the market with a price tag of around e600m (£400m).

Its current owner, ACS, is one of Spain's biggest construction and services groups. It is also a leading share-holder in Iberdrola, which has made an agreed bid for ScottishPower.

ACS bought Continental in 1999 for around £112m as part of a drive to reduce its reliance on the building trade.

It is reported to have appointed investment bankers to market Continental before Christmas, with a view to raising funds to augment its holding in Iberdrola.

ACS has amassed a near- 12% stake in the utility, after first acquiring a 10% interest for £2.2bn earlier this year.

FirstGroup declined to comment yesterday on what a company spokesman described as speculation regarding Continental.

However, the Spanish group which operates around 1000 vehicles covering areas including Madrid and Andalucia, would appear to present a natural target for FirstGroup.

After starting life as a bus operator in north-east Scotland, FirstGroup has developed road and rail operations extending across the UK, including the ScotRail franchise, and a substantial US school bus business.

However, it has no presence in continental Europe, where the liberalisation of transport networks is expected to create opportunities for UK trade players and private equity firms.

National Express recently bought Alsa, which is Spain's biggest scheduled coach operator, for £442m.

Announcing strong growth in interim profits in November, chief executive Moir Lockhead flagged up FirstGroup's ambitions to develop in new markets.

The company has expressed an interest in acquiring a stake in Connexxion, the Dutch state-owned bus and rail group, which is being privatised.

FirstGroup is bidding, with DSB, the Danish State rail operator, for the resund rail franchise which links Denmark and Sweden.