CITY OF PLYMOUTH Subject: Plymouth CityBus Limited Shareholding Committee: Council Date: 30 November 2009 Cabinet Member: Cllr Pengelly CMT Member: Director for Corporate Support Author: John Cremins Contact: Tel: 01752 304029 e-mail:
[email protected] Ref: Part: I Introduction In June 2009 the Council established a project to “seek, and negotiate proposed terms with, potential purchasers of shares in Plymouth CityBus subject to the full Council approving of any final recommendation for sale”. The purpose of this paper is to outline the action taken and events since 2 June 2009 and to recommend to the Council the sale of its shares in Plymouth CityBus Ltd. The Project Board appointed Go-Ahead Holding Ltd as the preferred bidder on 29 th October 2009. Details of the company are included in Appendix 5. This report identifies the major commercial aspects of the deal and the Council’s success in achieving a consideration greater then the estimated enterprise value in March 2008 of £15m - £17.5m. The Council will have completed a competitive bidding process by the date of the Council meeting. 1 Financial Terms The preferred bidder has offered a consideration of £20.2m for 100% of the shareholding subject to adjustments as described in the Financial Implications. The adjustments, including for debt and other payments to the Council, result in the Council receiving £19.58m. The funds would be paid on the completion of the sale, which it is expected would be in the week commencing 30 th November 2009. The consideration is higher than that reported for recent disposals in Chester (c£2m ), Preston (c£6.4m), Eastbourne (c£3.7m) and Bournemouth (c£13.8m).