CORRECTED-UPDATE 2-Scandlines sale to start in January - sources

Mon Nov 26, 2012 4:07pm GMT

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(In fifth paragraph, corrects spelling of potential bidder to DFDS, from DSDF.)

* Information memorandums to go out in January - sources

* DFDS Seaways, Grimaldi and private equity expected to bid - sources

* Owners hoping for valuation of 1.4 bln euros

FRANKFURT, Nov 26 (Reuters) - Private equity groups 3i and Allianz Capital Partners will start the sale of ferry group Scandlines early next year, sources close to the transaction said.

"Information memorandums are being sent out in January," one of the people said on Monday, adding 3i and ACP hoped to seal a deal in the first half for the largest ferry group in the southern Baltic.

The two firms each own 50 percent of Scandlines and appointed Goldman Sachs and ING in October to organise the sale, hoping to get up to 1.4 billion euros ($1.8 billion) for a group that carries 12 million passengers around the Baltic.

While 2012 has been a slow year for private equity sales, leading to a backlog of deals, a flurry was expected early next as owners prepare the sale of meter-reading company Ista, forklift-truck maker Kion and publisher Springer Science.

Danish rival DFDS Seaways and Italian peer Grimaldi were seen as the only shipping players considering a bid for Scandlines, a banker familiar with the industry said.

Private equity investors including Apollo, Axa Private Equity, Nordic Capital and Terra Firma and infrastructure funds such as RREEF were expected to take a look at the asset, the person said.

Neither 3i nor ACP, the private equity arm of German insurer Allianz, would comment.

They bought Scandlines at the peak of the buyouts boom in 2007, paying 1.5 billions euros, alongside minority investor Deutsche Seereederei which was bought out in 2010.

Scandlines had revenue of 611 million euros in 2011, up 8 percent, and total earnings before interest, tax, depreciation and amortisation of 167 million.

Swedish ferries group Stena Line, which bought five longer-distance freight ferry routes from Scandlines earlier this year for an undisclosed amount, is unlikely to be interested in the whole business.

Scandlines has been buffeted by high oil prices, competition from toll bridges on some routes and faces a threat to onboard retail sales as the harmonisation of taxes between Denmark, Germany and Sweden reduces the incentive for passengers to buy wines and spirits.

Separately, an undersea road and rail tunnel between Denmark and Germany across the Fehmarn Belt is being planned for 2020. If it goes ahead, it would hit passenger numbers on one of busiest routes for Scandlines. ($1 = 0.7717 euro) (Reporting by Arno Schuetze; Additional reporting by Simon Meads and Isabell Witt; Editing by Dan Lalor)

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