Tuesday, 9 April 2013

ComfortDelgro acquires London Bus Business

ComfortDelGro is flat at $1.915, barely reacting to news it plans to acquire part of FirstGroup PLC's London bus business and assets for around $109.0 million.
An analyst notes the deal isn't really big enough to move the needle, with a likely 2%-3% impact to ebitda.He says the acquisition is in line with CDG's strategy to grow its overseas operations.

"They are already the fifth largest operator (in the UK). Acquiring more buses will improve economies of scale," he notes. Orderbook quotes suggest the stock isn't likely to break out of its $1.905-$1.915 intraday range amid relatively slim volume and as traders are shunning defensive dividend plays for the session.

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