UNDETERRED by yet another monopoly investigation, Stagecoach has
announced the #4.25m purchase of an Ayrshire bus firm.
The Perth-based company will pay #1.7m in cash for A1 Buses and the
rest in new Stagecoach shares to be issued at a price based on the
closing level on January 27.
A1, which employs 120 people, runs about 75 vehicles and provides
local bus services in north Ayrshire with the main depots in Ardrossan,
Irvine, and Kilmarnock.
Owned by nine groups and effectively run as a co-operative, the
blue-and-white liveried vehicles turned over about #3.8m in fares last
year. Stagecoach intends applying the economies-of-scale efficiencies
that it has used to good effect in previous takeovers.
The purchase strengthens Stagecoach's presence in the Strathclyde
region -- particularly Ayrshire -- where it already runs
Kilmarnock-based Western and has a 20% slice of Strathclyde Buses.
The share in Strathclyde, agreed two months ago, is to be investigated
by the Monopolies and Mergers Commission. Stagecoach is currently
involved in three other MMC probes.
''We do not envisage any problems here and it must be remembered that
the vast majority of our bigger takeovers were passed without any
problems whatsoever,'' said Stagecoach's Keith Cochrane.
Stagecoach, floated on the Stock Exchange only 20 months ago, made
#14.5m in pre-tax profits for the six months to October, a 63% increase
over the same 1993 period.
But the rapid expansion has also caught the eye of the regulatory
bodies, and over the years, Stagecoach has been the subject of 23 Office
of Fair Trading investigations, most of them relatively minor.
More than #100m has been spent this year alone in mopping up a
scattering of urban and rural bus groups, most of them buy-outs from
previously state-run concerns.
One of a mere handful of quoted UK bus companies, Stagecoach controls
about 12% of the total British market and is the only group with
substantial overseas interests.
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