Alexander Dennis opts out of Optare, shares crash

Optare, the struggling Leeds-headquartered bus manufacturer, was stuck in reverse on Thursday on news that a possible takeover appears to be off.

Rival firm Alexander Dennis (ADL) had said it was interested in buying Optare but the sticking point has been the position of minority shareholder Ashok Leyland, an Indian bus producer.

ADL wanted to buy 100% of the issued stock but Ashok Leyland said it wouldn't sell its 26% stake "at any price".

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This seems to have put the kybosh on the deal.

Ashok Leyland has a standing agreement to invest in Optare for a significant increase in its shareholding. The offer from ADL would have been seen as a direct threat to those plans.

ADL had also wanted greater access to Optare's books, a request Optare would not agree to until it knew a firm offer for the available stock was likely.

Optare has fallen 82% during 2011 and 99% since March 2008. It employs around 800 people.

BS