Moves to reassure staff amid Arriva takeover talk

Mar 19 2010 by John Hill, The Journal

CITY analysts tried to calm the concerns of Arriva staff as German transport giant Deutsche Bahn confirmed it was looking to take over the Sunderland company.

Deutsche Bahn, which will next month take over the running of the Tyne & Wear Metro system, said yesterday that “discussions are ongoing” about a bid for Arriva, but that “there can be no certainty that any offer will be made”.

The statement from Deutsche Bahn, which already operates UK services including the Chiltern Railways route between London and Birmingham Snow, sent Arriva shares up another 5% yesterday after they rose 17% on Wednesday when Arriva revealed it was in talks about a possible deal.

Market talk suggests that the German firm may offer 700 pence a share for Arriva, which ended talks with SNCF subsidiary Keolis about a merger earlier this month.

Analysts feel that any cuts in staff following a merger are more likely to be in Germany where both companies have a presence rather than in the UK where Arriva’s business is strong and there is no synergy with Deutsche Bahn’s operations.

It is thought the move may be an attempt to smooth the road for a floatation of Deutsche Bahn. The company delayed a similar move in 2008, citing market turbulence.