04 February 2011

Making the Best of a Bad Deal

So Stagecoach sold its Preston Bus operation to Rotala. It seems an unusual choice but Rotala (who always used to be referred to as the 'AIM-listed Rotala') seemed chipper when releasing a statement about their recent purchase.

Omnibuses covered all of the bases at the time the purchase was made known. Except one.

Stagecoach did not want to sell Preston Bus. It fought a long battle with the Office of Fair Trading and Competition Commission (CC), citing many reasons why its ownership and integrated operation with its established, former Ribble, business throughout Manchester and Lancashire would provider a better deal for its passengers (and shareholders).

So when the inevitable became known and Stagecoach admitted defeat and placed their recent acquisition for sale, presumably they didn't have to sell to the highest bidder?

Theoretically, could Stagecoach have chosen to sell to Rotala over Arriva or First (both of whom had showed an interest in Preston Bus) or even Transdev because the former poses far less of a threat than the latter three? It is a slightly unusual £3.5 million purchase for a company with no operations locally.

Clearly, Stagecoach would have much preferred to retain Preston Bus - after all many thousands of pounds had already been spent on the bus war before the purchase and on integrating both companies after it. But provided the seller was happy to not accept the highest bid, it's a rouse that could potentially be employed by operators who fall foul of the CC in subsequent cases.

1 comment:

exfiles said...

I think you are in danger of underestimating Rotala. They have some pretty good operations around the Birmingham and Bristol areas. They have invested in a modern fleet and have stood up well to competition from the big boys. Preston bus fits in well with their other operations in terms of size and potential.

I believe you might come to respect their operations in the north as we have in the the Midlands and South West