smtglasgow
Member
Looks like a much more conservative bid than 2012. Always thought they dodged a bullet when Virgin threw their toys out of the pram.
Another new livery for First Leicester:-
https://www.facebook.com/613623182009256/posts/2563344647037090/?app=fbl
SO I take it if we want to talk about that award we go there, If we want to talk about how it will effect First group as a whole we can stay here?Please use the thread in UK Railway Discussion to discuss the award of the West Coast Partnership. The thread can be found here.
So Firstgroup are not pulling out of rail after all - they have been awarded a long contract for the West Coast. This means they will not be able to properly reflect the value of the US business post expected disposals, unless they somehow split the US businesses off.
SO I take it if we want to talk about that award we go there, If we want to talk about how it will effect First group as a whole we can stay here?
That is a bit of a strange tie up and could we see more joint bids for other routes? Also could this affect any supposed sell off? If the business is doing better by expanding could this enough to chase away certain board members and curtail any more bus sale offs. I suspect Greyhound for the chop either way?
How's it going to chase away Coast Capital? CC wanted First Group to quit UK Rail, they're now taking on one of the biggest franchises with undefined pension risks (which Stagecoach thought more sensible not to sign up too....). More likely to antagonize CC.
Yep that seems a sensible way to proceed!SO I take it if we want to talk about that award we go there, If we want to talk about how it will effect First group as a whole we can stay here?
Yep, can't disagree with your take on that. FWIW, Coast were complaining that rail was too capital intensive when it really isn't. You have to have a reasonable amount of working capital but much of the real capital is either NR or RoSCOs. It has traditionally been low margin (which was another CC criticism) but low risk. The issue now, irrespective of Coast's earlier protestations, is the level of risk associated with undefined pension liabilities, and that isn't going to placate Coast but quite the opposite.
They do need to crack on with the divestment of Greyhound, and the separation out of UK Bus. Of the latter, I'm surprised that an IPO isn't the preferred option if only as it's a tidier, simpler process rather than some protracted series of sales, MBOs and ESOPs for every OpCo.
Yep, can't disagree with your take on that. FWIW, Coast were complaining that rail was too capital intensive when it really isn't. You have to have a reasonable amount of working capital but much of the real capital is either NR or RoSCOs. It has traditionally been low margin (which was another CC criticism) but low risk. The issue now, irrespective of Coast's earlier protestations, is the level of risk associated with undefined pension liabilities, and that isn't going to placate Coast but quite the opposite.
They do need to crack on with the divestment of Greyhound, and the separation out of UK Bus. Of the latter, I'm surprised that an IPO isn't the preferred option if only as it's a tidier, simpler process rather than some protracted series of sales, MBOs and ESOPs for every OpCo.
Both Stagecoach & Arriva have declined to sign up to the undefined pensions risk, both have been excluded from Franchise bids & both are taking the DfT to court, yet First Group who are already in a sticky situation, 'oh go on then.....!' sounds very risky & dangerous to me....
I still a partial flotation (IPO) of the US division on NY Stock Exchange would be the best course of action, sell a smaller stake of the most value division. All seems to have gone quiet on the UK Bus disposal front.
This was mentioned at the recent Leicester running day (held at First's depot) as being along the lines of the Worcester Salt Route and Elgar buses which were on display however (if this is the finished thing) it's rather boring by comparison.Another new livery for First Leicester:-
https://www.facebook.com/613623182009256/posts/2563344647037090/?app=fbl
This was mentioned at the recent Leicester running day (held at First's depot) as being along the lines of the Worcester Salt Route and Elgar buses which were on display however (if this is the finished thing) it's rather boring by comparison.
The various assumptions and commercials are confidential but would assume that they've made an estimate of the liabilities (how, I don't know) and then low balled the bid in terms of premium payments and growth projections.
Given how long it's taken Arriva to get with their sale, I'm not surprised that there's little news on First and, of course, they'll be making sure they adhere to stock market rules.
Arriva's sale seems to be progressing, there's at least 10 interested parties in first round bidding for various parts / job lot.
It was announced on 27th March....Arriva's sale seems to be progressing, there's at least 10 interested parties in first round bidding for various parts / job lot.
I won't pretend to have a full understanding of exactly how an IPO works, but if Firstbus was 'separated out' of Firstgroup, i.e it becomes a separate company in it's own right, what happens to the historic pension obligations of Firstbus and its constituent subsidiaries and predecessors?
Do they remain with Firstgroup or 'migrate' to the new company?
The overused quip about "A large (underfunded) pension fund which happens to operate buses as well", comes to mind.
Of course if the the Pension obligations remain with the 'Old' company, then I can see that an IPO would be a realistic option.
A zombie company is one so burdened by debts and operational challenges, it exists mainly to pay debt interest charges and pensions, provide customers with services, employees jobs, and if listed companies then bumper pay for bosses.
Not much in it for shareholders ...
Yes, they had said that they weren't expecting to make much progress until nearer the year end.
It was announced on 27th March....
And?
It's a big complex business, it's going to take time for potential buyers to run over it with a fine tooth comb before deciding to where to pitch their offers & for what. Those offers will then need to be whittled down, it's not like it's it one takeover bid, it's effectively an auction, with not all bids being like for like....
Let's see how long it take for First to dispose of anything substantial.
First is also a big complex business. The announcement to split First was over two months after DB made their Arriva statement. These things will take time and so I'm not surprised that we've not heard anything yet after less than three months. However, the clock is ticking so you'd expect some concrete news about UK Bus or Greyhound within the next few months.
The original timetable was preferred bidder prior to summer break, that seems to have slipped somewhat.
And?
It's a big complex business, it's going to take time for potential buyers to run over it with a fine tooth comb before deciding to where to pitch their offers & for what. Those offers will then need to be whittled down, it's not like it's it one takeover bid, it's effectively an auction, with not all bids being like for like....
Let's see how long it take for First to dispose of anything substantial.
Think you’re right and too many false dawnsFirst Group share price largely unchanged, despite the award of the WCML franchise/management contract. That might suggest that any enthusiastic FGP supporters are just as easily outweighed by doubters, and concerns about legal actions, break up plans, management, costings etc etc
I presume it has absolutely nothing to do with Coast!!!, but Mr Martin ex Arriva has just been appointed Firstgroup chairman.
That's an idea. Keep the buses and get rid of the rest.It's interesting, in that David Martin's expertise lies in UK / European Buses, i.e. the division that First want to sell.
Could this lead to a change in strategy re: retaining UK bus??
Sorry? For a long time I've had a problem with seeing any future for their UK Bus unit under First Group ownership. They don't have the resources and (whether because of or as a consequence of is the perennial "chicken and egg") the expertise or any commitment to the business at the top level (and too frequently below).
Perhaps David Martin too saw this immediately when he became acquainted with the business, and quickly withdrew from his involvement with the Coast proposal. However it still leaves the Group with the problem of disposing of UK Bus. And unless we take the view that disposal is something that any Tom Dick or Harry with a bit of bookkeeping experience can handle (which seems to be the thoughts of some) then having a bit of relevant expertise on the Board seems a good thing (at least temporarily). Perhaps Martin (and at least a few of the beleaguered shareholders) think so too? However I doubt even he has a magic wand.
There's something I don't completely understand about the favoured-by-some IPO. How is that guaranteed to deal with the investment famine? Surely it merely passes the parcel? I can see it helps a lot if they've come up with a pensions solution though I wonder whether if like many too-good-to-be-true investment "opportunities" it either saves or sinks the company.