LONDON (AP) – The British government has agreed to sell its stake in Eurostar, the high-speed rail service that connects London with Paris and Brussels through a tunnel under the English Channel, for 757 million pounds ($1.1 billion), a move that’s prompted accusations that it is selling the family silver.
The Treasury said Wednesday that a group of international investors, Canada’s Caisse de depot et placement du Quebec and U.K.-based Hermes Infrastructure, agreed to buy the government’s 40-percent stake for 585.1 million pounds.
Eurostar, which began services in 1994 and has carried 150 million passengers, also agreed to redeem the government’s preference share – a share that carries no vote but ranks higher than ordinary shares when dividends are paid out – for an additional 172 million pounds.
The national railways of France and Belgium, SNCF and SNCB, could still stymie the bid as they have, in their capacity as co-owners, the option to buy the U.K. government’s stake but at a 15 percent premium. The closing of the deal depends on both declining to exercise that right, as well as regulatory approval.
Treasury chief George Osborne said the deal announced Wednesday was “a fantastic deal for U.K. taxpayers that exceeds expectations.” The sale is part of the government’s plan to sell off some 20 billion pounds in assets by 2020. The proceeds will be used to reduce the national debt.