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FirstGroup finds London bus firm is just the ticket

IN a #14.1m deal, FirstGroup has acquired a second bus company in London, Capital CityBus, which operates in the east and north-east of the city and started up in 1985, as one of the first independent bus operators to compete successfully with London Transport.

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Capital Citybus, which now has 5% of the London bus market, was bought by the CNT Group of Hong Kong before being sold in 1995 to its management, which took a 52.5% stake, and Lloyds Development Capital which had the remaining 47.5%. The group has #10m of debt, and of the #14.1m purchase price, #11.6m is in cash and #2.5m in FirstGroup shares to the company's senior management, which will remain with the group. Among these is contender for Mayor of London and former Conservative Transport Minister Steven Norris who took over as chairman 18 months ago with a salary thought to be between #100,000 and #150,000, and who landed an estimated #300,000 from the sale. Norris, 53, who has long expressed a personal preference for cars over trains and buses and once caused controversy by describing public transport passengers as ''dreadful human beings'', is one of eight dir- ectors who own half of the company and will share in a #7m windfall. Unlike the sale of companies which were originally in the public sector, there is no pay-out to the rest of the bus operator's 700 employees, who do not own shares. However, Peter Hendy, FirstGroup's divisional director in London and the South-East, said: ''One of the benefits is that they, in future, will be involved because FirstGroup has a strong share ownership plan.''

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