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148 
Ikarus swoops for STG
Page 18
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• Hungarian bus and coach builder Ikarus is to make a joint bid with Frontsource for the Scottish Transport Group, as a step to establishing an assembly plant in the UK.
'Icarus wants STG's engineering plants to make buses for sale to Europe. Frontsource, the fast-growing operator which has already bought 10 National Bus Company subsidiaries, is prepared to consider buying the state-owned group as a whole or as separate companies.
Scottish Secretary Malcolm Rifkind will recommend what to do with STG, which runs 3,500 buses and ferry operator Caledonian MacBrayne. Frontsource chairman Robert Beattie says there is a "lot of synergy" between his company and the Hungarian manufacturer.
Frontsource plans to form a new holding company with Ikarus UK representative Bob Robson and to develop assembly and routes under contract.
Frontsource and Robson are understood to be willing to pay £100 million for STG, or £70 million for the buses alone, but Beattie will not release figures. "We are in a bidding situation and don't want to say anything in front of competitors. We do have funds though."
The joint bid offers a better deal than other companies, as it provides an opportunity for job preservation, says Beattie.
Ikarus already has a fiveyear contract with coach builder Plaxtons for assembly of its 400 series buses.
If the joint bid for STG is successful, it could assemble bus bodies from Hungary on chassis and engines built elsewhere in Europe.