British Government Agrees to Sell Stake in Eurostar for £757 million
The British government made a blockbuster announcement this week after agreeing to sell its stake in the Eurostar high-speed railway service for an impressive £757 million, the United States equivalent of just over $1.15 billion.
According to Patrick Wintour of The Guardian, the government has agreed to a deal for its 40 percent of the Eurostar stake worth £585 million. The buyers are a business group made up of Canadian company Caisse de depot et placement du Quebec (CDPQ) and the United Kingdom-based Hermes Infrastructure.
Add in the fact that Eurostar has also agreed to redeem the Treasury’s preference share worth another £172 million, according to Wintour, and the deal is worth a total of £757 million. This is much higher return than was expected by the government when they announced the plans to sell its stake in the company last October.
CDPQ senior vice president Macky Tall spoke to RailwayGazette.com about what the investment means for the company and its clients:
“Today we are investing in one of Europe’s most efficient inter-city transport systems. Alongside leading industry players, we are becoming partners of a highly strategic asset that will generate stable and predictable returns for our clients. This major investment is another opportunity for us to further build on our expertise in the transport sector, while broadening our footprint in the global marketplace.”
While there is an agreement in place, it will not be approved until the other railway firms that own a portion of Eurostar have the chance to make a bid. France’s SNCF holds a 45 percent stake of the company and Belgium’s SNCB has a five percent stake.
The SNCF and SNCB have the chance to acquire England’s portion of the stakes if they match the agreed sale price (£585 million) and the added 15 percent premium agreed upon in the original contracts.
Both the SNCF and SNCB have 20 days to make the proper offer, but neither is expected to exercise their option, according to Wintour.
More by Donald Wood
Get Travel Deals and Travel News
Recent Travel Opinions
Airlines & Airports
Features & Advice
Destination & Tourism