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Report: Carlyle, Apollo in pole position to clinch deal for Arriva

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Report: Carlyle, Apollo in pole position to clinch deal for Arriva

Carlyle Group LP and Apollo Global Management LLC are most likely to prevail in the auction for British rail franchise company Arriva PLC, Reuters reported, citing people close to the matter.

The private equity firms are in the process of preparing their offers for the business owned by German state-owned rail operator Deutsche Bahn AG. Fellow private equity firm Lone Star is still in the competition, according to the report.

Arriva rivals including Keolis SA, Go-Ahead Group PLC, Stagecoach Group PLC, Transdev PLC and ComfortDelGro Corp. Ltd., which are only interested in acquiring parts of the business, are unlikely to win the auction since Deutsche Bahn aims to exit the unit in a single transaction, the people said.

The confirmatory bids for the business, which could be valued in a range of €3 billion to €4 billion, are due Sept. 12, while the final round of bidding is set to occur in late October, the people said.

Deutsche Bahn is still gearing up for a potential Amsterdam flotation of Arriva in 2019 and has recently held analyst presentations. It tapped Deutsche Bank and Citi as global coordinators with the help of BNP, HSBC, Credit Suisse and ING, the sources added.

Deutsche Bahn's supervisory board is set to meet Sept. 18 to talk about the transaction, sources said, adding that the final decision on whether to sell or float the business will be made in October.

Deutsche Bahn, the bidders and banks did not comment on the matter or were not immediately available for comment, Reuters reported.