5th Sep 2007 07:11
Press release For immediate release on 5th September, 2007 Candover announces the sale of its interest in Dakota, Minnesota & Eastern Railroad Corporation
Candover Investments plc ("Candover") announces that it has entered into an agreement to sell its interest in Dakota, Minnesota & Eastern Railroad Corporation ("DM&E") in order to facilitate a merger of DM&E with Canadian Pacific ("CP"). Candover originally invested in DM&E over 20 years ago.
DM&E operates 2,500 miles of track in the Midwest USA and has been pursuing astrategy to become the third rail carrier that is needed in Wyoming's PowderRiver Basin. The Powder River Basin is North America's largest and most rapidlygrowing source of low-cost, low-sulphur coal as well as the largest single railmarket in terms of volume.The transaction is expected to close in the next 30 to 60 days. The total pricebeing paid for DM&E is US$1.48 billion payable at closing, with futurecontingent payments of up to approximately US$1.0 billion, which will becomedue if certain performance criteria relating to the development of the PowderRiver Basin project are met prior to December 31st, 2025.Candover's investment was valued at ‚£15.5m at 31st December 2006 and has beenwritten up to ‚£27.4 million reflecting the estimated initial net consideration.No value has been ascribed to the deferred consideration, given the conditionalnature of the proceeds. Candover's maximum entitlement to the deferredconsideration is US$80 million.
The increase in the valuation represents an uplift in Candover's NAV of 55p per share.
Ends.For further information, please contact:
Candover +44 20 7489 9848 Nils Stoesser/Colin Buffin Tulchan +44 20 7353 4200 Peter Hewer/Susanna Voyle Candover T +44 (0) 20 7489 9848 Investments plc F +44 (0) 20 7248 5483 20 Old Bailey E [email protected]
London EC4M 7LN
CANDOVER INVESTMENTS PLCRelated Shares:
CDI.L