22 Dec Singapore giant in $182m buyout of 13cabs operator A2B

Source: Financial Review

By: Simon Evans

Singapore’s ComfortDelGro has made a $182 million buyout offer for A2B Australia, the operator of 13cabs, Silver Service and Cabcharge.

Sandon Capital, one of the company’s major investors, endorsed the bid as a “good deal” at the end of a turnaround of the embattled group’s fortunes overseen by its executive chairman, Mark Bayliss.

A2B said on Friday it had agreed to sell itself to ComfortDelGro’s Australian subsidiary for $1.45 per share. ComfortDelGro, one of the world’s largest transportation groups, already has a 9.25 per cent stake.

Sandon managing director Gabriel Radzyminski said his firm, which has a stake of more than 10 per cent, would wait for a report from an independent expert before accepting the deal. But, he added, it appeared a solid price. “It has the features that would seem to make it a good deal,” he said.

A2B, which also operates a taxi payments system, was known as Cabcharge until a name change in 2018. It was a pioneer in introducing non-cash payments for a taxi fare in the 1970s. The company listed in 1999.

A2B also said it had received the $78 million proceeds from the sale of a property in the inner-city Sydney suburb of Alexandria. The company will pay a fully franked dividend of 60¢ per share on January 30.

ComfortDelGro chief executive Cheng Siak Kian said the acquisition was in line with the strategy to expand its “point-to-point mobility business in our key markets”, and enable the group to add a new arm to its operations in Australia, which mainly comprise large privately operated bus services.

A2B’s Mr Bayliss said the backing of a large player with expertise in transport would allow the company to “accelerate growth for our customers, drivers and team members”. The company has been reworking its strategy since last year in the face of intense competition from Uber and other ride-sharing groups which has hurt demand for cabs.

The $1.45 per share offer price is at a 31 per cent premium to A2B’s three-month volume-weighted average share price. The A2B board is unanimously recommending the deal to shareholders because of the significant premium.

Sandon’s Mr Radzyminski said Mr Bayliss and his board and management had “done an exceptional job in turning the business around”.