ComfortDelGro (CDG), announced on July 29, that its business purchase agreement and share purchase agreement (SPA) with Scottish Citylink Coaches (SCCL) have been terminated with effect on the same day.
The transport operator had entered into both agreements on Dec 14, 2021, to acquire all the remaining shares it did not own in SCCL, turning it into a wholly-owned subsidiary of the CDG group.
Scottish Citylink became a 65%-owned subsidiary of CDG in 2005 through the group’s wholly-owned subsidiary, Braddell Limited.
On Jan 28, CDG announced that the transaction at the time will be delayed beyond the previously expected completion date of Feb 28. The reason behind the delay was due to a pending investigation of the proposed merger between National Express Group and Stagecoach Group.
The Competition and Markets Authority of the UK (CMA), at the time, issued an initial enforcement order (IEO) in relation to the merger, which amongst other things, prevents National Express or Stagecoach from disposing of any of their UK businesses or assets at the current time.
In its July 29 filing, CDG says it has, instead, entered into a new business purchase agreement with SCCL, Stagecoach Group, Stagecoach Services, Midland Red (South), Stagecoach Bus Holdings, Stagecoach Devon Limited (collectively known as the sellers) via Braddell.
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The new agreement is for the acquisition by SCCL of the businesses and business assets relating to the retail and customer services operations carried on by thesSellers for the marketing and sale of coach journeys within the UK under the “megabus” brand; and between Plymouth and Bristol under the “Falcon” brand (also known as the transaction).
The total consideration of the transaction is £1.7million ($2.8 million) for the allotment and issuance of 65,733 shares of SCCL to Stagecoach Bus Holdings.
The shares will be issued upon the transaction. Upon its issuance, Stagecoach Bus Holdings’ shareholding in SCCL will increase from 35% to 37.5% while Braddell’s shareholding in SCCL will decrease from 65% to 62.5%.
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According to CDG, the transaction will allow the group to extend its experience of operating intercity coaches into England and Wales.
“The previous transaction had been linked to the proposed merger between Stagecoach Group plc and National Express Group plc, which lapsed following the acquisition of Stagecoach Group plc by Pan-European Infrastructure III, SCSp, a fund managed by DWS Alternatives Global Limited,” says CDG in its July 29 filing.
“Both Braddell and the sellers continue to see commercial value in bringing the SCCL, “megabus” and “Falcon” brands together under one organisation,” it adds.
“Expanding the joint venture with Stagecoach Bus Holdings, which has worked well since 2005, provides an opportunity to do this under Stagecoach Group plc’s new ownership,” it continues.
The transaction is expected to take place in August, with its completion subject to satisfactory compliance with certain conditions precedent.
Shares in CDG closed 2 cents lower or 1.39% down at $1.42 on July 29.
