Shearings and Wallace Arnold brief CDR on talks

It has emerged that rival coach operators Wallace Arnold and Shearings called in Citigate Dewe Rogerson before revelations of their merger talks hit the media last weekend.

A spokeswoman for CDR said the agency had been hired at the end of last year to handle media interest in talks between the two companies.

She declined to comment further, insisting that neither Wallace Arnold nor Shearings had issued a statement about the talks, which media reports have speculated could result in a £140m merger in two weeks.

The work, led by CDR managing director Deborah Saw, is thought to have come to the agency via another part of the Citigate network’s relationship with the two companies.

Wallace Arnold and Shearings are owned by venture capital firms 3i and Bridgepoint Capital respectively. Under the terms of the £140m deal, which the coach firms are discussing, Bridgepoint would sell the £83m stake it bought from Rank in 1997 to 3i, nearly doubling its money.

3i would have around 70 per cent of the merged group with the remainder of the company held by management and staff. Combined sales for the new group would be around £200m.

Wallace Arnold and Shearings have tried to merge before, in 2001 and 2003, but failed to find the right deal for shareholders.

Founded in 1912, Wallace Arnold began life as a seaside tour operator but now sells trips to European destinations.

Last year, the firm hired Brighter PR for a consumer media drive to promote its coach tours to a younger audience.

Wigan-based Shearings was also founded towards the beginning of the last century and has around 250 staff.

The company was forced to cancel a planned £50m AIM flotation last year due to adverse market conditions.

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