is no longer proceeding with its planned acquisition of the North Devon
business and assets of First Devon and Cornwall Limited ("First").
It follows the decision by the Office of Fair Trading (OFT) to refer
the anticipated acquisition to the Competition Commission due to "concerns
the merger will reduce competition in local bus services in the area".
A Stagecoach Group spokesman said: "We are extremely disappointed at the
decision of the OFT to refer what is a relatively small transaction to the
Competition Commission.
"We do not believe we can justify spending further money and management
time on what has already been a lengthy process.
"As a result, we have reluctantly decided not to proceed with the
acquisition and have informed First we are withdrawing."
Stagecoach Group announced on 12 March 2012 that its subsidiary, Stagecoach
Devon Limited, had signed an agreement with First Devon and Cornwall to
acquire its business and assets in North Devon and Torridge for a gross
consideration of £2.8m.
ENDS
Announcement by First Group
North Devon Business: an update
Tuesday 10 July 2012
The proposed acquisition of FirstGroup plc’s North Devon bus operations by Stagecoach Group plc will no longer go ahead following the Office of Fair Trading's announcement today that it is referring the case to the Competition Commission.
Managers at First will now consult with Trade Unions and affected employees to review the implications of this decision.Giles Fearnley, First’s UK Bus Managing Director, said: “We are extremely disappointed by this decision which may lead to services being withdrawn and puts jobs at risk.
“We are now considering our options and will consult fully with affected employees and stakeholders about the implications of the OFT’s announcement.
“We are progressing our plan to reposition and rebalance our UK Bus portfolio to restore operating margins and help facilitate improved growth and returns. We are continuing to develop opportunities for a number of disposals of our bus operations and, despite today’s announcement, we are confident of future successful transactions in the coming months as a number of potential bidders exist in those markets where we have identified other businesses for disposal.”
<ends>
The North Devon business comprises around 100 employees, the depot facility in Barnstaple, a fleet of around 30 vehicles and ten routes (Services 1, 2, 3, 5/5C, 8 (operates summer only) 30/30C, 31, 32, X7 and X9). The routes cover Appledore, Barnstaple, Bideford, Braunton, Bude, Coombe Martin, Fremington, Ilfracombe, South Molton, Swimbridge, Westward Ho! and Woolacombe.
· The sale does not affect any other part of the First Devon and Cornwall business.
