Rival considers Optare bid
BUS maker Optare has been approached by rival firm Alexander Dennis about a potential bid for the business ahead of a general meeting next week.
The shareholders’ meeting had been convened to approve a deeply-discounted share issue to the company’s largest shareholder, Indian firm Ashok Leyland.
Alexander Dennis’s board has written to Optare’s chairman following the firm’s announcement on December 20 that it would raise £4m by selling shares to Ashok Leyland at 0.27p per share – a significant discount to the previous day’s closing price of 1.37p.
The Scottish firm, which also owns the Scarborough-based Plaxton bus brand and has a parts division in Skelmersdale, said that it “has written to the chairman of Optare and has requested information on the business of Optare in order to assess whether or not ADL might be prepared to consider making an offer for the entire issued share capital of Optare”.
It said there was no certainty that an offer would be made, but if it were it would be in cash.
Optare had justified the deal with Ashok Leyland – part of the Hinduja group – as it had given it access to a funding line of £12m. A condition of the funding, however, was that Ashok Leyland would be allowed to increase its stake in Optare to more than 75%.
Chief executive Jim Sumner had said the deal would allow it to complete a newly-won £18m order and “secures stability and the long-term future of the business”.
The firm had called a general meeting of shareholders due to take place on January 6 to approve the deal, but Alexander Dennis’s intervention could bring a rival suitor into play. Under City takeover rules, it must make an offer for Optare by January 25 or walk away for from a bid for another six months.
