Battle for train operator escalates

The Go-Ahead portfolio includes Thames valley operator Thames Trains

Efforts by two French companies to buy the owner of Thames Trains have escalated into a takeover war.

The duo on Thursday appealed to shareholders to back its £326m offer for bus and train operator Go-Ahead, after board members at the Newcastle-based firm rejected the deal.

The bidders, transport firm C3D and Rhone Capital, a private equity firm, said that under their ownership Go-Ahead would profit from transport investment programmes across Europe.

But directors of Go-Ahead, also a partner in the firm which runs Thameslink services, told BBC News Online that the move was an "awkward distraction" when they were in the final stages of negotiating a third UK franchise.

European force

C3D said its Transdev subsidiary had become a "major participant in the provision of public transport in Europe,"

"The combined strengths and experience of Transdev and Go-Ahead will enable both entities to play an important role in the development of integrated transport systems," C3D's chairman and chief executive Patrice Garnier said.

But Go-Ahead renewed its objections to the deal, which values each share at 650p, and was first unveiled to the firm's board last month.

"It was made clear [then] that the terms of the potential offer had absolutely no prospect of being recommended by the Go-Ahead board," the company said.

"The Go-Ahead board is again unanimous in its rejection of the offer."

Ignores true value

The proposal, while valuing shares at 50% more than they were before news of the original approach was announced, fails to recognise Go-Ahead's true value, the firm said.

The company, which has reported half year profits of £22m, is hoping to win a 20-year franchise to run the South Central commuter trains between London and destinations including Guildford and Brighton.

Go-Ahead said it would proceed with franchise talks despite the distraction of the takeover attempt.

"We will maintain our bid and continue to negotiate for what we hope will be a successful outcome," Chris Moyes, commercial director, told BBC News Online.

Growing foreign interest

The takeover attempt follows other foreign interest in Britain's privatised rail network.

Connex, owned by French leisure giant Vivendi, won two contracts in the original round of franchising.

And SNCF, France's state-owned operator which joined with Go-Ahead to win the Thameslink franchise, has expressed interest in two other routes.

Holland's national operator is bidding for a franchise, with Swiss and Swedish transport firms also rumoured to be preparing to enter the market.

Go-Ahead, which the French bidders accused of ignoring pleas for "constructive dialogue", is set to contact shareholders once they have received formal offer documents.

Shares in Go-Ahead fell 1p on Thursday to close at 675p.