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Bus company reverses into bus company
Posted on May 1, 2008 by Richard Beddard
Filed Under Companies |
I’m arranging interviews with Roy Stanley and Andrew Brian, Darwen’s (DHP) chairman and chief executive about their exciting new bus manufacturing company (yes, really - see below) - the deadline for the iBall script is tomorrow - when their PR adviser gives me a call saying, “Have you seen the news today?”
The shares are suspended while Darwen ‘considers‘ a reverse takeover, apparently of Optare, a bus manufacturer owned by Jamesstan - an investment vehicle run by the same Roy Stanley.
So what does this mean?
I asked Peter Temple, who’s written about Darwen on the Interactive Investor mothership recently, if it’s the classic reverse takeover where unlisted Optare would buy Darwen and get a controlling stake in the combined company and a listing on the stockmarket.
He said:
Not quite. That’s what it would mean if Darwen were simply a cash shell. In this case it’s not quite as simple as that. Both companies have ongoing businesses. Optare is probably larger than Darwen either in terms of turnover or assets - at least it is in terms of historic numbers though possibly not prospectively. The LSE would deem it a reverse takeover (a listed company taking over a larger - usually unlisted - one for shares) in circumstances like this. It’s purely a relative size thing based on historic numbers.
Change of control, though usually associated with reverse takeovers, is a separate issue. Normally shares are issued to the vendor that leave them controlling the merged entity. Since Roy Stanley owns Optare he is going to end up with a much bigger stake in Darwen, but he’s the prime mover in both companies anyway so there isn’t really any effective change of control.
As well as being chairman of Darwen, Mr Stanley is chairman of Tanfield (TAN). Tanfield has been a stockmarket superstar ever since it took took over Smith Electric Vehicles in 2004, though it’s fallen back a bit lately.
Mr Stanley fashioned Darwen last year out of a struggling coach builder and a design company, and intends it to become a leading bus manufacturer and a developer of hybrid low-emission diesel-electric buses and coaches. The recurring clean energy, and turnaround themes are not lost on investors.
Hopefully I’ll get my interviews next week, and we’ll see if Darwen/Optare has taken another step in that direction.
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I have shares in both Tanfield at 12P AND Darwen at 70.00. I am confused over all the talk of Roy Stanley and where his loyalties lay. I want to invest more in Tanfield, as i feel this is potentially a really good company with plenty more to give. Do you think that because the price has fell through the floor at Tanfield and the gloss has now gone that Roy is now concentrating on his other company.Should i invest in Tanfield, Iwould really do with your advice.