Down Under, ComfortDelGro chases Swan
by admin , July 16, 2010, 1600hrs

SINGAPORE (July 16, 2010) – ComfortDelGro, Singapore’s largest transport operator as well as the world’s second largest land transport group, has launched a S$46.8 million takeover bid for Swan Taxis, the biggest provider of taxi services in and around Perth, Western Australia.

In a regulatory filing today, ComfortDelGro announced that together with Swan Taxies, the pair has lodged a bidder’s statement, along with the necessary documents with the Australian Securities and Investment Commission.

ComfortDelGro’s offer for all the shares and options in Swan Taxi would be internally funded.

The Singapore-based transport operator is already the largest private bus operators in New South Wales and Victoria – to add to its considerable overseas footprint in places including China, the United Kingdom and Vietnam.

Swan Taxis, which has been in existence since 1928, started out as a co-operative before being restructured into an unlisted public company in 2007. It currently operates a fleet of 1,667 taxis – or a 91 per cent share of the market.

For the 12 months ended June 30 last year, Swan Taxis turned in revenue of A$13.3 million and profit before tax of A$4.6 million.

ComfortDelGro noted that “the prospects for the taxi industry in the city are bright” with Perth’s population expected to keep growing.

Citing Swan Taxi’s “advanced despatch system and strong customer base”, ComfortDelGro Group CEO Kua Hong Pak said: “We are excited about the prospects that this proposed acquisition offers us – a geographical expansion and extension of another of our core businesses in Australia.”


SWAN BOARD BACKS BID

ComfortDelGro said the offer letter – together with the lodged documents – would be sent in two weeks’ time to all Swan Taxis shareholders. The shareholders have seven weeks to accept the offer, which is conditional upon approval from the regulatory authorities.

It added that once the minimum threshold of 90 per cent acceptances is reached, it will make a compulsory acquisition of all shares.

Under the proposal from ConfortDelGro, Swan Taxis would continue to operate without any major changes, ensuring continued employment for all current employees with Swan Taxis.

The Swan Taxis board has recommended shareholders to accept the offer, with its chairman Kevin Foley reiterating that the board is backing the bid after it was "satisfied it represented a strong return to shareholders and the best opportunity to develop the business to meet growing demand".

Mr Foley said in a statement: "For all our valued drivers and staff it will be business as usual… ComfortDelGro plans to build on Swan Taxis’ achievements, to groom the business and ensure Swan Taxis continues to deliver to (Western Australia).”

ComfortDelGro said the acquisition is not expected to have any material impact on its net tangible assets and earnings per share for the current financial year.