Circles

There’s a certain irony following yesterday’s announcement that Telling's Golden Miller has recommended to its shareholders that Arriva buys the AIM-listed 207-vehicle TGM operation. Not only does this bring TGM’s Network Colchester back onto the Arriva fold, it rejoins Arriva and TGM itself.

For between June 1990 and August 1993, TGM was a subsidiary of Midland Fox, itself part of British Bus. British Bus was the successor to the Drawlane group that, when bought by Cowie, transmogrified into Arriva. The 1993 sale saw TGM pass back to its original owner, Steve Telling.

1993 was also the year that British Bus bought Colchester Borough Transport. This followed a bus war from October that year with what at the time was still Eastern National. Reputedly for £1, British Bus bought a weakened Colchester a month later, seeing cuts in drivers’ pay and conditions. Arriva inherited but sold the operation 11 years later in 2004 to TGM, because Colchester was under-performing.

1993 is a year that keeps cropping up. TGM began bus services that year (in Cardiff), others joining from 1995.

Is TGM a good fit with Arriva?

Arriva thinks so. It’s to pay £10.3mil. But in spite of AIM listing from 2003, TGM has been decidedly lacklustre of late and even reported a pre-tax loss for the year to December 2006 (though this is expected to reverse this time around). Expect considerable improvement in margins.

TGM’s National Express contracts are only as secure as the break clauses. It’s airside transfer and maintenance operations are an interesting addition to the Arriva business. It’s other main activity is coaching, plus buses operated by Bruton's & Network Colchester and recently acquired Wiltax. TGM operates 96 buses, compared to 111 coaches, of which 16 operate for NatEx.

TGM sold its London bus business (which included acquired Capital Logistics in 1999) to National Express in 2005, now trading as Travel London and Travel Surrey.

No doubt Veolia and ComfortDelGro are both miffed.