Mobico to sell West Midlands bus business for £24m

(Sharecast News) - Mobico said on Tuesday that it has agreed to sell its West Midland bus business (UK Bus) to the West Midlands Combined Authority (WMCA) for upfront proceeds of £24m.

The company, formerly National Express, said the deal is in line with its strategy to monetise its UK Bus assets, and "substantially" de-risks the group from the forthcoming uncertainty of franchising in the area over the coming years.

Mobico said there would be upfront residual proceeds of around £24m, and a further deferred consideration of £5.5m, with half payable at the end of 2027 and half payable on vacant possession of the Birmingham Central depot expected at the end of 2029.

Executive chair Phil White said: "This agreement is another significant milestone in making Mobico simpler and stronger while substantially de-risking the group. UK Bus has been break-even for a number of years and the uncertainty of future franchising in the area presented a significant headwind for the group in managing the cost base and liabilities of the business going forward.

"As the West Midlands moves toward a franchised network, WMCA is the logical buyer to facilitate that transition. The transaction represents fair value for the assets and liabilities of UK Bus while providing certainty for our colleagues upon completion."

At 1026 BST, the shares were up 0.4% at 26.50p.

See latest RNS on Investegate