Bus maker Alexander Dennis eyes takeover deal

BUS builder Alexander Dennis is poised to rebound from last year’s failed takeover of Leeds-based Optare with an overseas acquisition.

The Falkirk-based manufacturer is in exclusive talks to buy what chief executive Colin Robertson described as a “very sound business in a very, very exciting market”.

The discussions, subject to confidentiality restrictions, may conclude within the next couple of months.

Robertson said: “The deal would help to round out our geographic diversity.”

The foreign firm is one of a number of targets identified by Alexander Dennis during the past nine months as the previously indebted company has built up cash reserves.

Accounts to be signed off this week are expected to show that Alexander Dennis ended 2011 with net cash of £9 million, compared with a debt pile that peaked at more than £70m in 2007.

The privately owned firm is believed to have further bolstered its cash position by a significant amount in the first quarter of this year.

Alexander Dennis made a tentative takeover approach for Aim-quoted Optare in December, with an eye towards taking on the company’s shorter and narrower “Solo” line of buses.

But the offer was withdrawn just a day later, after Indian-owned Ashok Leyland said its 25 per cent stake in Optare was not for sale “to anyone at any price”.

■ Colin Robertson will feature as the Monday Interview in The Scotsman tomorrow.