Arriva's shares rose 17 per cent following confirmation of the bid. The bidder declined to comment but is believed to have made an indicative approach of 700p a share, valuing the British rail and bus company at about £1.35bn, excluding debt.
News of the bid comes after Arriva ended preliminary talks with French state-rail operator SNCF over an equity tie-up with the latter's transport unit Keolis. There is some speculation that ComfortDelGro of Singapore, which operates London's Metroline bus company, could also be a possible bidder for Arriva.
Sunderland-based Arriva, which employs over 44,000 people and runs Cross Country and Arriva Wales trains and bus franchises in the South East and Midlands, also operates in twelve European countries which now account for half of its sales and profits.The company's pre-tax profits fell 19 per cent to £121.7m last year as the company struggled with falling passenger numbers and higher fuel costs. However, its revenues were 3.5 per cent higher at £3.15bn.
Deutsche Bahn is the owner of Britain's Chiltern Railways and Laing Rail, and has a 50 per cent stake in the London Overground rail network. It also owns UK freight company EDS and is reportedly considering a Channel Tunnel service to rival Eurostar.
