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BET SELLS OUT TO THC By Derek Moses
Page 30
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f35m. will be paid for Ordinary shareholding
THE British Electric Traction Co. Ltd. has agreed to sell its holdings in UK bus companies to the State-owned Transport Holding Company. THC had made an offer of £35m. for the BET Group's Ordinary shareholdings in the associated and subsidiary bus companies (listed below); if the deal goes through as planned, THC will add 11,500 p.s.v. to its fleet—making a grand total of around 25,000 vehicles.
THC has an equal shareholding with BET in most of the companies (as the table shows). The offer is conditional upon statutory authority to enable THC to implement it becoming available not later than August 31, 1968. (There may be some speculation about this in the present economic and political situation.) Subject to this, THC will make cash offers to acquire the Ordinary sharesof the remaining shareholders on comparable terms to be worked out by Warburgs and Barings.
The THC will also make cash offers to acquire all the Preference shares of the above companies, at prices to be agreed. It is now Government policy to obtain complete control of companies taken over in the transport field.
Total book value of the BET Group's equity investment in the associated bus companies and the book value of the net assets of the subsidiaries amounted to L20,174,000 at March 31 last. Gross ordinary dividend from the associated companies and pre-tax profits of the subsidiary companies (less minority interests) amounted to 1,838,000..
The BET board has accepted the terms of an offer which was 'open until Wednesday of this week. Most of the minority shareholdings in the BET Group bus companies are held by local people or interests, and stem from the early formative years.
Wednesday's news of the acceptance came as a surprise, as it was only on the previous Thursday that news of the THC bid was released. Shocked surprise seemed a widespread reaction in the bus industry when last week's bid became known. Some 24 companies are involved, with a market value estimated to total £75m.
A THC spokesman said that the negotiations were similar to those which led up to the acquisition of the Tilling and Scottish Bus Group companies. The identity of the BET companies would probably be retained, at least until PTAs or CTAs were formed.
Mrs. Barbara Castle stated in the House of Commons on Friday that the negotiations were being undertaken with her authority and approval. It is difficult, therefore, to escape the political implications ofthe announcement.
Reaction to the merger talks was swift, with an immediate statement from the Passenger Vehicle Operators Association— and a stunned group of BET bus company general managers not knowing what to say, as many of them had been personally involved in the VOICE campaign against Mrs. Castle's plans for PTAs. What became abundantly clear was that the general managers' first intimation of the talks came from the joint Press statement and not from their own directors. Mr. J. W. Womar, general manager of Midland Red, and well known for his activities as chairman of the West Midlands Anti-Nationalization Action Committee, admitted to being "rather shattered" at the announcement of the negotiations.
Other general managers, many of them on area committees of VOICE, refused to comment, though their position is obviously rather embarrassing. A meeting of VOICE was expected to be held late this week to consider the future representation of these men on the area committees.
In a television interview on Friday, Mr. Womar was asked why he thought this apparent about-face had taken place. He replied, in respect to Midland Red: "You must appreciate the position the company was in, and for that matter a lot of other companies. We were threatened with the heart of the undertaking being torn out and the services outside the threatened PTA area left to wither on the bough, and I imagine that under these circumstances, my directors have considered that the offer that has been made is one that ought to be considered."
Mr. Womar was then asked: "Does this mean that there is not so much a change of heart as an acceptance of the inevitable?" He replied that he did not accept this at all and added that he did not withdraw one word of what he had said against PTAs. They would be a complete disaster for this country.
Asked if he thought a PTA was inevitable in the West Midlands, Mr. Womar said that he was not sure about this, as the THC worked on strictly commercial lines and on company structure as the BET did. If they had that instead of "these wretched PTAs" he thought some good might well come out of it.
Turning to his personal position, the interviewer asked Mr. Woman "You have been closely identified with this antinationalization publicity campaign. Are you going to find it embarrassing to continue with the company now?" He replied: "No, I think I have got to go on and do what I believe is right. I don't believe in PTAs and I will go on saying so."
A reaction from the manufacturing industry came from Daimler, which stated that "as major suppliers of chassis for all branches of p.s.v. operation, namely THC, BET, municipal and private undertakings, the company was confident that its vehicles would continue to provide an essential contribution to passenger transport in both home and overseas markets."
'Sold down the river'
The attitude of PVOA members to the news can be summed up in the statement issued shortly after the news was announced last Thursday. It said: "The country's independent operators will feel they have been 'sold down the river' if this State takeover of a large section of the industry goes through. The British Electric Traction Company has shared our opposition to Mrs. Castle's proposals for Passenger Transport Authorities, because, as practical operators, they know that such a system would lead to inefficiency and be contrary to the public interest. Now they have played into her hands.
"However, there is still hope, because the Transport Holding Company itself opposes the ill-conceived Passenger Transport Authority plan. Moreover, with such a large section of the passenger transport industry in public ownership, there could be absolutely no justification for special legislation to bring about coordination of services—where this is practicable, but so far not achieved. Certainly independent companies will, as they have always made clear, co-operate in any workable scheme to improve service to the public.
"This change cannot alter our attitude to Passenger Transport Authorities: they are against the public interest and we shall oppose them with every resource at our disposal. If the electors knew the chaos that has resulted in the USA, where the prototype Passenger Transport Authority which inspired Mrs. Castle is losing £10m a year, they would soon put paid to this nonsense. We shall see that they are told the true facts."