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Deutsche Bahn revealed as Arriva suitor

German transport operator Deutsche Bahn has confirmed it is the company that made an unsolicited bid approach for UK bus and train operator Arriva.

Responding to press speculation the German state-controlled company said it has been talking with Arriva about a possible cash offer and that these talks are still in progress.

Deutsche Bahn gave no details regarding the terms of the offer though market speculation has centred around a price of around 700p, a few pence below the mid-market price for Arriva at the time the German company broke cover with confirmation of its approach.

Broker Nomura, however, thinks a take-out value of at least 790p would be reasonable. 'Adding 100bp [basis points] to the current EV/EBITDA [enterprise value/earnings before interest, tax, depreciation and amortisation] multiple would add approximately 90p per share. Assuming an EV/EBITDA of 6.5x for Europe and leaving the other divisions unchanged would equate to 790p per share', Nomura said

Deutsche Bahn is the owner of Laing Rail, the company that operates the Chiltern Railway franchise.

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