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Takeover bid threatens CTRL completion


COMPLETION OF the £5bn Channel Tunnel Rail Link could be undermined by a takeover bid from investment banker Adrian Montague, operator London & Continental Railways (LCR) warned this week.

'It would be a distraction for the management team, ' said LCR chief executive Rob Holden. 'Clearly on long term projects the fial stages are the most difficult, ' he said.

Earlier this month the Department for Transport (DfT) confirmed that it had been approached by a potential bidder for the project. DfT approval is needed for a takeover as the project's private finance element is guaranteed by government.

CTRL is entering the final stages of construction: fit out and integration work with the already completed first phase will take place over the next year.

Holden said a bid ahead of the planned 2007 completion deadline was unlikely to be good for shareholders.

'We would get better value on completion of Section Two, ' said Holden. 'If we waited for a few months after completion we will be able to demonstrate the reliability of the infrastructure, ' he added.

By then the high risk construction phase will have passed, so the value of shares in LCR held by Bechtel, UBS, EDF Energy, SNCF, and National Express can be expected to rise.

Holden said that shareholders were treating talk of a bid as speculative.

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