Alexander Dennis to upset Ashok Leyland’s bid for UK bus maker Optare
28 Dec 2011
British bus and coach manufacturer Alexander Dennis Ltd (ADL) is planning to launch a cash takeover of its rival bus maker Optare Plc, a move that threatens Ashok Leyland's attempt to take majority control of Optare.
Falkirk-based ADL, the largest bus builder in the UK has requested information from Optare in order to find out whether ADL can make a bid for the whole company.
The move comes a week after Ashok Leyland, the flagship company of the London-based Hinduja Group, planned to hike its stake Optare by acquiring an additional 49.1 per cent for over Rs30 crore, taking its total stake in the British bus maker to 75.1 per cent. (See: Ashok Leyland raises stake in British bus maker Optare to 75.1 %)
Following discussions with the UK Takeover Panel, the regulator ruled that ADL must make a firm offer or decide not to bid by 5.00 pm on 25 January 2012. If it decides not to make a firm offer, then ADL will not be allowed to launch another offer for the next six months.
Ashok Leyland planned to increase its stake in Optare through a £40,04,495 share placing by Optare as part of a re-financing agreement.
The re-financing has been achieved by Ashok Leyland facilitating a credit-line to support Optare's re-banking options and providing a substantially improved working capital facility for the business.