London buses travel along Whitehall in Westminster in London, Britain. Picture: REUTERS/HANNAH MCKAYLow valuations, hopes that travellers will ditch cars, and government incentives to invest in environmentally friendly vehicles are enticing buyers, analysts and investors said.
StageCoach, the country’s largest bus and coach operator, was the first to agree to a deal. A European infrastructure fund managed by DWS outbid rival coach operator National Express in March. “The favourable policy environment, including increasingly a bus-friendly UK, is clearly an attraction for long-term investors,” said RBC Capital analyst Ruairi Cullinane.Shares in StageCoach and Go-Ahead are down by more than 35% each since the start of 2020, while FirstGroup, supported by its recent bid approach, is up by about 6% in the same period.
Go-Ahead, which runs more than 6,000 buses in England, became the latest takeover target this week after it revealed it had two potential buyers.