[Federal Register Volume 64, Number 140 (Thursday, July 22, 1999)]
[Notices]
[Pages 39555-39556]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18745]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Docket No. MC-F-20948]


Stagecoach Holdings plc--Control--Coach USA, Inc., et al.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving finance application.

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SUMMARY: Stagecoach Holdings plc (Stagecoach), a noncarrier that does 
not control any U.S. carriers, filed an application under 49 U.S.C. 
14303 to acquire control of Coach USA, Inc. (Coach), a noncarrier; its 
7 noncarrier regional management subsidiaries (the management 
companies); 1 and the 79 motor passenger subsidiaries (the 
operating carriers) controlled by Coach through the management 
companies. Persons wishing to oppose the application must follow the 
rules under 49 CFR 1182.5 and 1182.8.2 The Board has 
tentatively approved the transaction, and, if no opposing comments are 
timely filed, this notice will be the final Board action.

    \1\ The management companies are: Coach USA North Central, Inc.; 
Coach USA Northeast, Inc.; Coach USA South Central, Inc.; Coach USA 
Southeast, Inc.; Coach USA West, Inc.; Coach Canada, Inc.; and 
Yellow Cab Service Corporation.
    \2\ Revised procedures governing finance applications filed 
under 49 U.S.C. 14303 were adopted in Revisions to Regulations 
Governing Finance Applications Involving Motor Passenger Carriers, 
STB Ex Parte No. 559 (STB served Sept. 1, 1998).

DATES: Comments must be filed by September 7, 1999. Applicants may file 
a reply by September 20, 1999. If no comments are filed by September 7, 
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1999, this notice is effective on that date.

ADDRESSES: Send an original and 10 copies of any comments referring to 
STB Docket No. MC-F-20948 to: Surface Transportation Board, Office of 
the Secretary, Case Control Unit, 1925 K Street, NW, Washington, DC 
20423-0001. In addition, send one copy of comments to applicants' 
representatives: William C. Sippel, Oppenheimer Wolff & Donnelly 
(Illinois), Two Prudential Plaza, 45th Floor, 180 North Stetson Avenue, 
Chicago, IL 60601-6710; and Betty Jo Christian, Steptoe & Johnson LLP, 
1330 Connecticut Avenue, N.W., Washington, DC 20036.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for 
the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Stagecoach is a public limited company 
organized under the laws of Scotland with no bus or other 
transportation interests in the United States. With operations in eight 
other countries, however, Stagecoach is one of the world's largest 
providers of passenger transportation services.3 It had 
annual revenues for the fiscal year ending April 30, 1999, of $2.475 
billion.
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    \3\ Stagecoach's principal business consists of divisions that 
provide significant bus and rail passenger services in the United 
Kingdom, and an overseas division that operates buses in 
Scandinavia, Hong Kong, New Zealand, Portugal, Australia, and China.
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    Coach is a Delaware corporation that controls the operating 
carriers 4 through the management companies. Coach also 
controls several non-federally regulated bus, van, and taxicab 
companies.5
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    \4\ Air Travel Transportation, Inc. (MC-166420); Airlines 
Acquisition Co., Inc. (MC-223575); Airport Bus of Bakersfield (MC-
163191); Airport Limousine Service, Inc. (MC-315702); America 
Charters, Ltd. (MC-153814); ASTI, Inc. (MC-252353); Americoach 
Tours, Ltd. (MC-212649); Antelope Valley Bus, Inc. (MC-125057); 
Arrow Line, Inc. (MC-1934); Arrow Stage Lines, Inc. (MC-29592); 
Autocar Connaisseur, Inc. (MC-166643); Bayou City Coaches, Inc. (MC-
245246); Black Hawk-Central City Ace Express, Inc. (MC-273611); Blue 
Bird Coach Lines, Inc. (MC-108531); Bonanza Bus Lines, Inc. (MC-
13028); Browder Tours, Inc. (MC-236290); Brunswick Transportation 
Company d/b/a The Maine Line (MC-109495); Butler Motor Transit, Inc. 
(MC-126876); California Charters, Inc. (MC-241211); Cape Transit 
Corp. (MC-161678); Central Cab Company (MC-133058); Chenango Valley 
Bus Lines, Inc. (MC-141324); Clinton Avenue Bus Company (MC-223062); 
Colonial Coach Corp. (MC-39491); Community Coach, Inc. (MC-76022); 
Community Transit Lines, Inc. (MC-145548); Desert Stage Lines, Inc. 
(MC-140919); El Expreso, Inc. (MC-244195); Erie Coach Lines Company 
(MC-127027); Gad-About Tours, Inc. (MC-198451); GL Bus Lines, Inc. 
(MC-180074); Gray Line Air Shuttle, Inc. (MC-218255); Gray Line New 
York Tours, Inc. (MC-180229); Gray Line Tours of Southern Nevada 
(MC-127564); Grosvenor Bus Lines, Inc. (MC-157317); Gulf Coast 
Transportation, Inc. (MC-201397); H.A.M.L. Corp. (MC-195792); Hudson 
Transit Corporation (MC-133403); Hudson Transit Lines, Inc. (MC-
228); International Bus Services, Inc. (MC-155937); Kansas City 
Executive Coach, Inc. (MC-203805); Keeshin Charter Services, Inc. 
(MC-118044); Keeshin Transportation, LP (MC-263222); Kerrville Bus 
Company, Inc. (MC-27530); K-T Contract Services, Inc. (MC-218583); 
Leisure Time Tours, Inc. (MC-142011); Metro Cars, Inc. (MC-276823); 
Mini Coach of Boston (MC-231090); Mountaineer Coach, Inc. (MC-
229627); Niagara Scenic Bus Lines, Inc. (MC-30787); Olympia Trails 
Bus Co., Inc. (MC-138146); Orange, Newark, Elizabeth Bus, Inc. (MC-
206227); P&S Transportation, Inc. (MC-255382); Pawtuxet Valley Bus 
Lines (MC-115432); PCSTC, Inc. (MC-184852); Pittsburgh 
Transportation Charter Services, Inc. (MC-319195); Powder River 
Transportation Services, Inc. (MC-161531); Progressive 
Transportation Services, Inc. (MC-247074); Red & Tan Charter, Inc. 
(MC-204842); Red & Tan Tours (MC-162174); Rockland Coaches, Inc. 
(MC-29890); Ross Tours, Inc. (MC-175674); Salt Lake Coaches, Inc. 
(MC-347528); Stardust Tours, Inc. d/b/a Gray Line Tours of Memphis 
(MC-318341); Suburban Management Corp. (MC-264527); Suburban Trails, 
Inc. (MC-149081); Suburban Transit Corp. (MC-115116); Syracuse and 
Oswego Coach Lines, Inc. (MC-117805); Texas Bus Lines, Inc. (MC-
37640); Tippett Travel, Inc. d/b/a Marie's Charter Bus Lines (MC-
174043); Transportation Management Services, Inc. (MC-237433); 
Trentway-Wagar, Inc. (MC-126430); Tucker Transportation Co., Inc. 
(MC-223424); Utica-Rome Bus Co., Inc. (MC-7914); Valen 
Transportation, Inc. (MC-212398); Van Nortwick Bros., Inc. (MC-
149025); Wisconsin Coach Lines, Inc. (MC-123432); Worthen Van 
Service, Inc. (MC-142573); and 2948-7238 Quebec, Inc. d/b/a Visite 
Touristique de Quebec (MC-302514).
    \5\ The appropriate filing has been made under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, with 
respect to that portion of the transaction that involves 
Stagecoach's control of non-federally regulated entities.
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    Stagecoach has formed two wholly owned subsidiaries for the purpose 
of

[[Page 39556]]

effectuating the proposed transaction: SCH Holdings Corp. (Holdings); 
and SCH Acquisition Corp. (Acquisition), a wholly owned subsidiary of 
Holdings. Both of these companies are Delaware corporations, with no 
interest in any regulated carrier. Pursuant to an agreement among 
Stagecoach, Holdings, Acquisition, and Coach, Holdings has undertaken a 
cash tender offer for up to all of the outstanding shares of Coach. 
Upon satisfaction of certain conditions and completion of the tender 
offer, Acquisition will be merged with and into Coach, with Coach as 
the surviving entity. Coach will then be merged with and into Holdings, 
with Holdings as the surviving entity, and, upon completion of that 
merger, the name of Holdings will be changed to Coach USA, Inc. If more 
than 80% of the stock of Coach is tendered in response to the tender 
offer, the first of these mergers may be unnecessary.6 After 
completion of these mergers, Coach will be a subsidiary of 
Stagecoach.7 The transaction will not result in any transfer 
of operating authority held by any of the operating carriers or in any 
change in the essential nature of the services provided by those 
carriers. The management of Coach is expected to remain largely in 
place, and Stagecoach does not currently plan to change the manner in 
which Coach is operated.
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    \6\ Applicants have indicated that the structure of the 
transaction may be altered as future circumstances warrant. For 
example, an additional holding company or U.S. limited partnership 
may be placed in the corporate chain between Stagecoach and Coach. 
Applicants have requested that the control authority granted herein 
include any such intermediate entities. Applicants have represented 
that any such change will not affect the material terms of the 
transaction, and that they will inform the Board of any changes in 
the present arrangement.
    \7\ Pending Board action on this application, the stock will be 
held in independent voting trusts.
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    Applicants submit that granting the application will be consistent 
with the public interest and will have no adverse effects on the 
adequacy of transportation to the public, fixed charges, or the 
interests of employees. Applicants also submit that the proposed 
transaction will have no adverse effect on competition, because it will 
not result in the consolidation of any currently independent motor 
passenger carriers. On the contrary, applicants believe that the 
transaction will significantly benefit the traveling public and 
employees through efficiency savings and innovations that will result 
from the combination of the financial and management resources of 
Stagecoach and Coach. Specifically, it is anticipated that by providing 
Coach access to Stagecoach's significant resources and global 
transportation management expertise, the transaction will enable Coach 
to expand its carrier acquisition program and to improve the level and 
amount of services already offered to the operating carriers. Further, 
it is anticipated that fixed charges may be reduced as a result of 
Stagecoach's ability to refinance Coach's existing debt on more 
favorable terms. Each of these benefits, applicants contend, will 
translate into benefits for the traveling public in the form of 
improved and more competitive bus services.
    Applicants state that Coach and its subsidiaries will continue to 
observe current collectively bargained agreements and that no layoffs 
are anticipated as a consequence of the transaction.
    Applicants certify that: (1) The aggregate gross operating revenues 
from interstate operations of the operating companies exceeded $2 
million during the 12-month period ending December 31, 1998; (2) none 
of the operating carriers holds an unsatisfactory safety rating from 
the U.S. Department of Transportation; (3) each has sufficient 
liability insurance; (4) none of the parties is domiciled in Mexico nor 
owned or controlled by persons of that country; and (5) approval of the 
transaction will not significantly affect either the quality of the 
human environment or the conservation of energy resources. Additional 
information may be obtained from the applicants' representatives.
    Under 49 U.S.C. 14303(b), we must approve and authorize a 
transaction we find consistent with the public interest, taking into 
consideration at least: (1) The effect of the transaction on the 
adequacy of transportation to the public; (2) the total fixed charges 
that result; and (3) the interest of affected carrier employees.
    On the basis of the application, we find that the proposed 
acquisition of control is consistent with the public interest and 
should be authorized. If any opposing comments are timely filed, this 
finding will be deemed to be vacated and, unless a final decision can 
be made on the record as developed, a procedural schedule will be 
adopted to reconsider the application.\8\ If no opposing comments are 
filed by the expiration of the comment period, this decision will take 
effect automatically and will be the final Board action.
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    \8\ Under revised 49 CFR 1182.6(c), a procedural schedule will 
not be issued if we are able to dispose of opposition to the 
application on the basis of comments and the reply.
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    Board decisions and notices are available on our website at 
WWW.STB.DOT.GOV.''
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.
    It is ordered:
    1. The proposed acquisition of control is approved and authorized, 
subject to the filing of opposing comments.
    2. If timely opposing comments are filed, the findings made in this 
decision will be deemed as having been vacated.
    3. This decision will be effective on September 7, 1999, unless 
timely opposing comments are filed.
    4. A copy of this notice will be served on: (1) The U.S. Department 
of Justice, Antitrust Division, 10th Street & Pennsylvania Avenue, NW, 
Washington, DC 20530; and (2) the US Department of Transportation, 
Office of Motor Carriers-HIA 30, 400 Virginia Avenue, SW, Suite 600, 
Washington, DC 20004.

    Decided: July 15, 1999.

    By the Board, Chairman Morgan, Vice Chairman Clyburn, and 
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-18745 Filed 7-21-99; 8:45 am]
BILLING CODE 4915-00-P