(FGP.L) FirstGroup PLC Buy/Sell

LONDON, March 19 (Reuters) - Takeover target Arriva is refusing to open its books to Deutsche Bahn unless the German firm increases its almost 1.4 billion pounds ($2.1 billion) bid for the train and bus operator, The Times reported on Friday.
The state-owned German railway firm, which already operates the Chiltern Railways route between London and Birmingham, has yet to make a final decision on whether to increase its offer, the newspaper said. It did not quote a source for the report.
Deutsche Bahn on Thursday confirmed it was in talks with Arriva over a possible cash bid for the British operator as it sought to expand in Europe's newly deregulated international rail markets.
Market speculation on Wednesday had linked the German group with a 700 pence-per-share bid, valuing the business at just under 1.4 billion pounds before debt. Arriva had net debt of 852 million pounds at the end of 2009.

Sunderland, northeast England-based Arriva runs bus and train services in 12 European countries, including Germany, making it one of the continent's few public-transport operators with a wide international footprint.
However, Arriva's own operations in Germany could attract the attention of competition authorities in the event of a bid.
Arriva has a rail and bus business in Germany which had sales of just over 400 million pounds last year. It is the third-biggest rail operator in Germany behind Deutsche Bahn and Veolia.

(Reporting by Jon Boyle)

($1=.6545 pounds)

Keywords: ARRIVA DEUTSCHEBAHN/

COPYRIGHT

Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

By Matt Scuffham

LONDON, March 18 (Reuters) - Deutsche Bahn has confirmed it is in talks with Arriva over a possible bid for the UK-based train and bus operator, as it seeks to expand in Europe's newly deregulated international rail markets.
The German state railway firm, which already operates the Chiltern Railways route between London and Birmingham, said on Thursday it had made an approach to Arriva regarding a possible cash offer and said discussions were continuing.
Market speculation on Wednesday had linked the German group with a 700 pence-per-share bid, valuing the business at just under 1.4 billion pounds ($2.1 billion) before debt. Arriva had net debt of 852 million pounds at the end of 2009.
Shares in Arriva were up 4.4 percent at 707 pence at 1359 GMT, extending Wednesday's gain of 17 percent.
The shares are up 51 percent since Jan. 27, the day before news broke that it was in talks with French state railway group SNCF about an equity tie-up with European train amd tram operator Keolis, an SNCF affiliate.
Two weeks ago Arriva announced that those talks had ended, with no agreement reached.

Sunderland, northeast England-based Arriva runs bus and train services in 12 European countries, including Germany, making it one of the continent's few public-transport operators with a wide international footprint.
JP Morgan analyst Edward Stanford said a takeover by Deutsche Bahn would be a logical strategic move given its stated interest in building a presence outside the German market where it is restricted from growing further by the cartel authorities.
"Arriva is in our view a unique asset for potential bidders interested in gaining scale in the deregulating European public transport market. It has a strong presence in a number of major European markets," said JP Morgan analyst Edward Stanford.
Shore Capital analyst Karl Burns agreed that Deutsche Bahn's would have been attracted by the potential capture of Arriva's European operations rather than those in the UK.
"The most likely motive of Deutsche Bahn would be to gain a footprint within the liberalising European transport market, where EU directives require public transport liberalisation over the next 10 years," he said.
Burns noted Deutsche Bahn has a limited presence in Europe with just 23 percent of revenue coming from outside Germany.
In Britain, it operates the CrossCountry franchise, running between Aberdeen in Scotland and Penzance in southwest England.
However, Arriva's own operations in Germany could attract the attention of competition authorities in the event of a bid.
Arriva has a rail and bus business in Germany which had sales of just over 400 million pounds last year. It is the third-biggest rail operator in Germany behind Deutsche Bahn and Veolia.
"If Deutsche Bahn was to buy Arriva then divestments would probably be required in German rail," analysts at UBS said in a research note.
JP Morgan's Stanford considered a possible take-out price would range between 700 pence a share at the low end and 840 pence at the upper end and said he would not rule out a counter offer in view of Arriva's continental European operations.
UBS put a value of 700 pence on the business, based on recent deals in the sector at 8 times historical EBITDA.

(Additional reporting by Quentin Webb; Editing by Victoria Bryan and Greg Mahlich)

($1=.6545 pounds) Keywords: ARRIVA DEUTSCHEBAHN/ (matthew.scuffham@reuters.com; +44 20 7542 6734)

COPYRIGHT

Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

LONDON, March 18 (Reuters) - Germany's national rail operator Deutsche Bahn confirmed on Thursday it had made an approach to Arriva over a possible cash offer for the British transport group.
In a short statement, Deutsche Bahn said discussions were ongoing but there could be no certainty an offer would be made.
Shares in Arriva were up 2.5 percent to 693.5 pence at 1040 GMT, building on a gain of 17 percent on Wednesday as traders cited market talk of a 700 pence-per-share bid.
A bid at this level would value Arriva at 1.2 billion pounds ($1.8 billion).
Arriva runs buses, rail franchises and other services in 12 European countries, making it one of the continent's few public-transport operators with a wide international footprint.
Arriva's rivals include France's Keolis, and the firm that is being created by the merger of Veolia's Veolia Transport and Transdev, which is owned by state bank Caisse des Depots, as well as UK-focused First Group and National Express.
Arriva two weeks ago ended early-stage talks with SNCF , the French state railway group over an equity tie-up with Keolis.
Earlier this month Arriva said 2009 pretax profit fell 19 percent to 121.7 million pounds.

(Reporting by Matt Scuffham; Editing by Victoria Bryan)

($1=.6545 Pound) Keywords: ARRIVA DEUTSCHE BAHN/ (matthew.scuffham@reuters.com; +44 20 7542 6734)

COPYRIGHT

Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

TR-1 (i) NOTIFICATION OF MAJOR INTERESTS IN SHARES

1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:

FirstGroup plc

2. Reason for the notification State
Yes/No

An acquisition or disposal of voting rights Yes

An acquisition or disposal of financial instruments which may result in the acquisition of shares already issued to which voting rights are attached An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments An event changing the breakdown of voting rights Other (please specify):

3. Full name of person(s) subject to the notification AXA S.A, 25 Avenue
obligation (iii): Matignon, 75008 Paris
and its group of
companies

4. Full name of shareholder(s) (if different from 3.) (iv):
5. Date of the transaction (and date on which the 15 March 2010

threshold is crossed or reached if different) (v):
6. Date on which issuer notified: 17 March 2010

7. Threshold(s) that is/are crossed or reached: 5%

8. Notified details:

A: Voting rights attached to shares

Class/type of Situation Resulting situation
shares previous to the after the triggering
if possible Triggering transaction
using the transaction

Number Number Number Number of voting % of voting
of of of rights rights
Shares Voting shares
Rights
Direct Direct Indirect Direct Indirect

345217 23,640,363 23,640,363 3,684,331 3,684,331 20,510,532 0.77 4.26

B: Financial Instruments

Resulting situation after the triggering transaction

Type of Expiration Exercise/ Number of % of voting
financial date Conversion voting rights
instrument Period/ Date rights that may
be
acquired if the
instrument is
exercised/
converted

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments

Resulting situation after triggering transaction

Type of Exercise Expiration Exercise/ Number of % of voting
financial date Conversion voting rights
instrument price Period/ rights that may
Date be
acquired if the
instrument is
exercised/
converted

Nominal Delta

Total (A+B+C)
Number of voting rights % of voting rights

24,194,863 5.03%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable (xv):

Name of the Company/Fund Number of Shares % of issued share
capital

Alliance Bernstein 961,657.00 0.199891

Direct
Alliance Capital Management 1,243,200.00 0.258413

Direct
AXA Colonia Konzern 21,355.00 0.004439

Direct
AXA Colonia Konzern 49,446.00 0.010278

Indirect
AXA Financial, Inc 7,588,512.00 1.577356

Indirect
AXA France 1,380,445.00 0.286941

Indirect
AXA IM UK 1,458,119.00 0.303086

Direct
AXA IM UK 2,756,592.00 0.572988

Indirect
AXA Rosenberg 8,735,537.00 1.815778

Indirect
Total Direct 3,684,331 0.76583

Total Indirect 20,510,532 4.26334

TOTAL 24,194,863 5.02917

Proxy Voting:

10. Name of the proxy holder: 11. Number of voting rights proxy holder will cease to hold: 12. Date on which proxy holder will cease to hold voting rights:

13. Additional information:
14. Contact name: Balenkosi Dungeni

15. Contact telephone number: 020 7003 2823

Annex Notification Of Major Interests In Shares (xvi)

A: Identity of the person or legal entity subject to the notification obligation Full name (including legal form for legal entities) Contact address (registered office for legal entities) Phone number Other useful information (at least legal representative for legal persons) B: Identity of the notifier, if applicable (xvii) Full name Contact address Phone number Other useful information (e.g. functional relationship with the person or legal entity subject to the notification obligation)

C: Additional information

Notes

i. This form is to be sent to the issuer or underlying issuer and to be filed with the competent authority.

ii. Either the full name of the legal entity or another method for identifying the issuer or underlying issuer, provided it is reliable and accurate.

iii. This should be the full name of (a) the shareholder; (b) the person acquiring, disposing of or exercising voting rights in the cases provided for in DTR5.2.1 (b) to (h); (c) all the parties to the agreement referred to in DTR5.2.1 (a), or (d) the direct or indirect holder of financial instruments entitled to acquire shares already issued to which voting rights are attached, as appropriate.

In relation to the transactions referred to in points DTR5.2.1 (b) to (h), the following list is provided as indication of the persons who should be mentioned: