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GB Railfreight attracts interest

 The UK’s second-largest rail freight operator, France’s national railway and the Channel tunnel operator have all emerged as potential bidders for one of the UK’s largest rail freight companies, reports Robert White of Logistics Week.

FirstGroup, the highly leveraged bus and rail operator, has put GB Railfreight, which it bought in 2003, up for sale after a wave of consolidation saw operators in Europe sold at high valuations.

FirstGroup initially said it wanted to keep GB Railfreight, which it bought as part of its acquisition of Aim-listed GB Railways, within the group.

All its other units are all focused on passenger transport. However, FirstGroup has been seeking to reduce its debt since it took over Laidlaw International, the US owner of the Greyhound bus brand, for $3.6bn in 2007 .

A series of rail freight operators has changed hands throughout Europe , often at prices seen as generous in the market.

France’s state-owned SNCF bought the non-French freight business of Veolia Transport last year.

Groupe Eurotunnel, the Channel tunnel operator, bought Veolia’s French operations .

Germany’s Deutsche Bahn last year bought a 49 per cent stake in Italy’s Ferrovie Nord Cargo and assumed 95 per cent ownership of Poland’s PTK Holding.

According to one person familiar with the sale process, the UK’s Freightliner looked best-placed to buy GB Railfreight. However, SNCF also remained a contender, in a move that would provide it with its first foothold in the UK market, according to the person.

Eurotunnel, which is seeking to build up its freight operations to boost freight levels through the tunnel, also appears to be interested.

Eurotunnel declined to confirm it was pursuing GB Railfreight specifically but said: “We would always be interested in any opportunities.” Another person involved indicated that SNCF and Freightliner were contenders.

Freightliner, which started out as the container-carrying business of the nationalised British Rail, was bought by Bahrain’s Arcapita for £340m ($519m) in 2008 . “It’s complicated,” one person said of the bidding process.

GB Railfreight has challenged the UK rail freight market’s two biggest operators – German-owned DB Schenker and Freightliner – as the first new, independent rail freight operator set up after rail privatisation.

http://logisticsweek.com/operations-and-news/2010/05/gb-railfreight-attracts-interest-financial-times/

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