Newcastle’s Go-Ahead agrees to £648m takeover

Go-Ahead CEO Christian Schreyer

By Mark McSherry

Newcastle-headquartered international bus and rail giant Go-Ahead Group agreed late on Monday to be bought by a consortium of Australia’s Kinetic Holding Co and Spain-based transport infrastructure management firm Globalvia Inversiones for about £648 million.

Go-Ahead runs nearly a quarter of London’s buses, operates Govia Thameslink and also operates transport services in Ireland, Singapore, Norway and Germany.

The 1,500 pence-per-share offer represents a premium of 10.2% to Go-Ahead’s Monday closing price after the shares rose 12.4% following news earlier on Monday of takeover approaches from two suitors.

The offer represents a 24% a premium to Go-Ahead’s closing price on June 10, 2022, the last business day prior to publication of the Kinetic announcement.

Kinetic is backed by Canadian pension fund OPTrust.

The offer price includes 1,450 pence in cash and a special dividend of 50p per Go-Ahead Share “in lieu of a final dividend for the year ending 2 July 2022.”

Go-Ahead had said on Monday morning it received two separate approaches regarding possible cash takeover offers that it “would be minded to recommend” should a firm offer be made.

The other potential bidder was Australia-based transport firm Kelsian Group Ltd.

Go-Ahead, which runs more than 6,000 buses in England and Britain’s largest passenger rail contract, becomes the latest UK transport takeover target after Aberdeen-based FirstGroup and Perth-based Stagecoach.

Go-Ahead CEO Christian Schreyer said: “This is a compelling offer which combines an attractive valuation for shareholders with bright prospects for Go-Ahead’s operations and colleagues around the world.

“We have confidence in Go-Ahead’s future as an independent business, but see that being part of a truly global mass transit platform will yield exciting opportunities.

“We welcome the commitment of Kinetic and Globalvia to invest in the decarbonisation and digitalisation of our operations, and to support our strategy, The Next Billion Journeys.

“As a standalone business within a global platform, we will be better placed than ever to connect communities and to fulfil our purpose of moving our customers towards a smarter and healthier planet.”

Kinetic Co-CEO Michael Sewards said: “We are delighted that the board of Go-Ahead has unanimously recommended our offer to shareholders.

“As Australia and New Zealand’s largest and fastest growing bus operator, with the majority of our revenue aligned to long-term government contracts, we will bring proven experience to accelerate the delivery of Go-Ahead’s Next Billion Journeys growth strategy.

“We are one of world’s largest operators of electric buses and we will not only provide the necessary long term capital but the expertise to facilitate the rapid transition of Go-Ahead’s bus fleet from diesel to zero emission technology.”

Globalvia CEO Javier Pérez Fortea said: “As a leader in the management of transport infrastructure concessions, specialising in railways, we believe we can add real value in helping Go-Ahead become a leading global, multi-modal, mass transit platform.

“With operations around the world, our experience will help Go-Ahead grow in existing and new geographies while remaining a standalone UK business.

“Along with Kinetic we have a long-term approach and we are culturally aligned sharing a common mission based on delivering value for our customers.”