Comfortdelgro Could Rise 40% After Aussie Bus Deal
By Daniel Shane
Could a bigger drive in Australia speed up a turnaround at Singapore’s Comfortdelgro Corp (C52. SG)?
The public transport and taxi operator has picked up the remaining 49% it doesn’t already own in Aussie bus company Cabcharge for AUD186 million. The joint venture was setup in 2005 and runs more than 1,700 buses in the states of New South Wales and Victoria.
The company’s funding the acquisition in cash, and this lessens the likelihood of Comfortdelgro splashing out some of its net cash pile on a special dividend or other goodies for shareholders.
Comfortdelgro has pursued international opportunities in recent years, which makes sense given the tiny size of its home market. It runs London’s ubiquitous red buses, for example. Unsurprisingly its U.K. earnings have been slammed by a weaker sterling following Britain’s vote to leave the European Union.
Source: Barron's Asia