ARRIVA plc is to divest itself of its contract hire and leasing business Arriva Automotive Solutions following a second profits warning within two months. The announcement coincided with the shock resignation of group managing director Michael Gwilt after just six months in the job.
His role would have been fundamentally altered when Arriva separates its finance division - which includes Arriva Automotive Solutions, the UK's third largest contract hire and fleet management company with 77,000 vehicles - from its core bus and motor dealership businesses. Len Clayton, managing director of Arriva Automotive Solutions, said three options were available to the finance division; a management buyout, a stock market flotation or acquisition by a third party. A decision is likely to be made within six months.
The fleet industry rumour mill has already gone into overdrive, fuelling speculation that GE Capital Fleet Services, Cendant Corporation, Halifax - the only major bank without a vehicle leasing business - Abbey National and HSBC Group are lining up as potential bidders. Arriva's finance division should fetch between £280 million and £350 million, in recognition of Arriva Automotive Solutions' strong long term performance, top class client base and healthy profits. The City reacted to Arriva's profits warning by knocking 70p off the price of Arriva plc shares, down to 370p.
His role would have been fundamentally altered when Arriva separates its finance division - which includes Arriva Automotive Solutions, the UK's third largest contract hire and fleet management company with 77,000 vehicles - from its core bus and motor dealership businesses. Len Clayton, managing director of Arriva Automotive Solutions, said three options were available to the finance division; a management buyout, a stock market flotation or acquisition by a third party. A decision is likely to be made within six months.
The fleet industry rumour mill has already gone into overdrive, fuelling speculation that GE Capital Fleet Services, Cendant Corporation, Halifax - the only major bank without a vehicle leasing business - Abbey National and HSBC Group are lining up as potential bidders. Arriva's finance division should fetch between £280 million and £350 million, in recognition of Arriva Automotive Solutions' strong long term performance, top class client base and healthy profits. The City reacted to Arriva's profits warning by knocking 70p off the price of Arriva plc shares, down to 370p.
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