16 Feb 2011 13:31
Stagecoach Group plc
Twin America sightseeing joint venture
16 February 2011
Twin America sightseeing joint venture
Stagecoach Group plc ("the Group") notes the findings by the United States Surface Transportation Board ("STB") regarding the status of the Group's New York sightseeing joint venture Twin America, LLC.
In March 2009, the Group entered into an agreement to create a new joint venture to operate the sightseeing
services of the Group's Gray Line New York business and the business of CitySights NY.
The joint venture operates services under both the Gray Line and CitySights brands and competes with a range of sightseeing bus services in New York, as well as other leisure tours. Gray Line New York operates double decker bus, motorcoach and trolley bus tours of New York City and the surrounding area as well as other related services.
The Group holds 50% of the voting rights and 60% of the economic rights in the joint venture with CitySights NY holding the remaining voting rights and economic rights. For the 12-month period ended 30 April 2010, the Group's share of Twin America's profit after tax was £8.5m.
Twin America sought formal STB approval of the joint venture. It believes customers have benefitted from good quality, high value, and better co-ordinated services, while the joint venture has achieved cost savings and other synergies.
While the STB found it had jurisdiction in this case, it has not given approval for the transaction. The STB has given Twin America the option of separating the business, assets and management of the joint venture. Alternatively, the joint venture may divest its interstate services, which account for around 1% of the joint venture's revenues. The latter option would remove the transaction from STB jurisdiction and place it within the authority of the New York State Attorney General.
The Group notes the findings of the STB and will take time to study its report in detail before deciding on the appropriate course of action by 25 March 2011 as requested by the STB.
ENDS
For further information, please contact:
Stagecoach Group plc www.stagecoachgroup.com
Martin Griffiths, Finance Director 01738 442111
Steven Stewart, Director of Corporate Communications 07764 774680
Notes
Stagecoach Group
Stagecoach Group is a leading international public transport group, with extensive bus and rail operations in the UK and North America.