Sale of UK Government’s 40% share to net £757.1m for Treasury
The UK Government has agreed to sell its 40% stake in Eurostar to a consortium comprising Caisse de dépôt et placement du Québec (CDPQ) and Hermes Infrastructure.
The consortium will pay £585.1 million for the share in the business, while Eurostar has agreed to redeem the government’s preference share, providing a further £172 million to the government. The government announced in the autumn that it aimed to sell a number of assets in order to reduce national debt.
The remaining shares are owned by French state-owned railway company SNCF (55%) and state-owned Belgian company SNCB (5%). These companies have a pre-emption right to acquire the government’s 40% stake for a 15% premium to the agreed price, and closure of the sale is conditional on the companies not exercising this right. The transaction is also conditional on regulatory approval, with closure expected in the second quarter of 2015.
CDPQ is an institutional investor that manages funds primarily for 33 public and para-public pension and insurance plans, while Hermes Infrastructure is a UK-based fund managing approximately £3 billion on behalf of its clients.