Chiltern Trains put up for sale
Financial Times: July 19 2007
By Robert Wright, Transport Correspondent
The operating company which runs Chiltern Trains is to be put up for sale less than a month after winning a contract to run London overground rail services.
John Laing announced the planned sale of its rail business, which last month won the new London Rail franchise in a joint venture with Hong Kong’s MTR, in a statement on a general reorganisation of the business. The company was taken private by Henderson Global Investors in December.
The sale represents a rare opportunity to buy a holder of UK rail franchises. Most franchises are held by one of the five large bus and train operators and tend not to change hands.
Laing, which is being advised by KPMG Corporate Finance, is thought to be seeking to sell Chiltern Trains and its stake in the London Rail operator together.
Chiltern Trains, which runs services from London Marylebone to Buckinghamshire and the West Midlands, holds one of the longest franchises on the UK rail network, having been awarded a 20-year franchise in 2000. It has turned around the fortunes of the route, which the nationalised British Rail had wanted to close.
The London Rail concession is much smaller but is the first overground rail franchise specified and paid for by Transport for London, the London Mayor’s transport organisation.
National Express, the bus and train operator which has recently missed out in several major franchise bids, is expected to look at the business. Stagecoach Group, another large bus and train operator, is known previously to have considered buying Laing Rail but rejected the idea.
Laing gave no timetable for the sale, saying only that it was in the early stages of preparing to sell the business.
In the reorganisation, John Laing Infrastructure – which undertakes road projects – and John Laing Social Infrastructure – which provides hospitals, prisons and other similar projects – will be merged. John Laing Projects and Developments – undertaking rail infrastructure and other projects with the public sector – will remain a separate division. Chris Waples, a former senior manager at Amey, the construction group, will become operations director of the group – a new post – from next month.