French state thwarts £400m Go-Ahead bid

The French consortium bidding for Go-Ahead last night threw in the towel after the French government warned it not to table a higher hostile offer valuing the rail and bus operator at 800p-a-share or £400m.

The French consortium bidding for Go-Ahead last night threw in the towel after the French government warned it not to table a higher hostile offer valuing the rail and bus operator at 800p-a-share or £400m.

The intervention means that the existing bid from C3D, a joint venture between the state-controlled Caisse des Depots-Developpement and Rhone Capital, is now certain to fail. The current bid is worth 650p.

The French government's move is understood to have come after the state-owned French railway SNCF, which is already Go-Ahead's partner on the Thameslink rail franchise, objected to C3D making an increased offer.

C3D and its financial advisers approached Go-Ahead on Monday night seeking a board recommendation for an offer at 800p but were turned down. Attempts continued until yesterday evening to persuade Go-Ahead to recommend an offer, but these failed.

Sources in the C3D camp said that but for the political objections, it would have gone ahead and made a higher offer to shareholders over the heads of the Go-Ahead board. This could have forced SNFC to intervene with a bid in excess of 800p.

In a statement issued last night after the close of the market, C3D said it would not increase its offer in the absence of a recommendation and said its 650p offer would remain open until 25 October. As of Tuesday night, the offer had 0.13 per cent acceptances.

Go-Ahead shares are likely to fall sharply when the market opens this morning. Last night they closed 7.5p higher at 737.5p.