Chiltern Railways auction attracts strong interest

LONDON Mon Sep 17, 2007 3:43pm BST

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LONDON (Reuters) - Chiltern Railways is being evaluated by around 15 potential bidders after fund manager Henderson HGI.L put it up for sale last week, an industry source said on Monday.

Interested parties have been given about a month to evaluate Chiltern, which is seen fetching up to 100 million pounds ($200 million), as well as two other rail businesses.

Henderson is selling the train assets, so that its project manager division, John Laing, can focus on its core infrastructure activities.

"There's been pretty serious interest," said the source. "There's been more than a handful of infrastructure funds, but less than ten, and the strategics and some overseas parties are interested as well."

Go-Ahead Group (GOG.L) and Arriva ARI.L said this month they would be looking at Chiltern, while National Express (NEX.L) and Stagecoach (SGC.L), Germany's Deutsche Bahn DBN.UL and French bus and rail operator Keolis are also seen as likely bidders.

Chiltern Railways, which this month was named passenger operator of the year, has a franchise to run services northwest from London towards Birmingham until 2020.

It was acquired by Henderson last year when the fund manager bought John Laing for around 950 million pounds.

"The sale is for all of Laing's rail assets, so also includes a number of joint ventures like the London Overground and the Wrexham, Shropshire and Marylebone Railway," added the source.

Henderson has appointed KPMG to advise on the sale. Both groups declined to comment.

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