Australian taxi operator A2B shareholders vote in favour of ComfortDelGro acquisition

 

SHAREHOLDERS of Australian taxi network operator A2B voted in favour of ComfortDelGro’s acquisition on Monday (Mar 25), with 97.7 per cent of votes cast for the proposed deal.

On Dec 22, its unit ComfortDelGro Corporation Australia proposed to acquire all shares in A2B Australia that it does not already own via a scheme of arrangement, in which the land transport operator will pay A$1.45 (S$1.27) in cash per share.

Before the proposed acquisition, ComfortDelGro and its Australian subsidiary Swan Taxis held about 9.3 per cent of A2B, which is listed on the Australian Securities Exchange. The Australian taxi network operator’s offerings range from taxi services brands to cab-charge digital payment solutions.

ComfortDelGro said that the orders approving the scheme will be sought from the Supreme Court of New South Wales on Mar 28. The transaction is expected to be implemented in April 2024, subject to satisfaction of all other applicable conditions.

“Upon completion, A2B’s 8,000-vehicle network will join ComfortDelGro’s current 21,300 strong global taxi fleet,” added ComfortDelGro.

ComfortDelGro’s managing director and group chief executive Cheng Siak Kian said: “A2B is an excellent strategic fit that will allow us to grow our point-to-point offering and deepen our presence in the Australian market as a multi-modal mobility operator.”

At A$1.45 apiece, the consideration for ComfortDelGro to acquire the remaining shares in A2B stands at A$165.1 million, based on its Dec 22 announcement. It intends to fund the transaction through existing cash and bank facilities.

On a fully diluted basis, the scheme to acquire the rest of A2B values the Australian transport company’s issued equity value at A$182 million, said the local transport operator.

Cheng said during FY2023 results briefing on Dec 29 that the acquisition of A2B is one of the group’s moves to grow and defend its core transport businesses, which drove a 4.2 per cent revenue jump and a 76.5 per cent net profit growth on the year for H2.

He added that the company is also focused on growing into new territories and new capabilities, with its global rail business demonstrating notable growth and successes in Europe.

In February 2023, it also acquired CMAC Group, a UK-based ground-transport management and accommodation network specialist, for £80.2 million (S$136.2 million).

Through joint ventures with foreign partners, it has bagged a six-year contract for a metro line in Paris last July, on top of an 11-year contract to operate and maintain the Stockholm Metro last January.

In 2022, CDG secured an eight-year contract to operate New Zealand’s largest rail network through a joint venture with Australian rail operator and maintenance company UGL Rail Services. The S$1.13 billion contract also marked the first overseas heavy-rail venture by a Singaporean company.

Shares of ComfortDelGro : C52 +0.72% were trading up 1.5 per cent, or S$0.02, to S$1.40 as at 9.11 am on Monday.