By Markus Wacket
(Reuters) - The supervisory board of Deutsche Bahn will not make a decision on privatising the company's international businesses that was expected to be made at a December meeting, government and Bahn sources said on Friday.
The German government and executives of the railway have not yet agreed on how to split proceeds from the possible sale of a minority share in Deutsche Bahn's passenger transport business Arriva or its Schenker logistics arm, the sources said.
Deutsche Bahn, which is owned by the German government, has hired investment bank Lazard (N:LAZ) to explore options for Arriva, including a possible stock listing.
Supervisory board sources told Reuters in September that Deutsche Bahn was likely to try to find a strategic investor or pension fund to take a minority stake in either Arriva or Schenker. A stock market flotation was unlikely, they said at the time.
But the German government will have to take a decision on whether to list Arriva and, eventually, Schenker, or whether to try to attract money in a different manner.
Deutsche Bahn wants to raise capital from the two businesses to reduce debt of more than 17 billion euros ($18.48 billion).
Arriva, which Deutsche Bahn bought for 1.6 billion pounds in 2010, posted earnings before interest, taxes, depreciation, and amortisation of 498 million euros on sales of 4.5 billion euros in 2014.
The German government cancelled a previous attempt to sell a minority stake in Deutsche Bahn when the global financial crisis hit in 2008.
Deutsche Bahn operates rail networks, stations, a long-distance and a regional rail business and has Arriva and Schenker. If Deutsche Bahn does opt to list Arriva, it may float 25 percent of the bus and train.
British peers like Stagecoach (L:SGC) and National Express (L:NEX) trade at 6.5 to 7 times their core earnings. If it fetches a similar multiple, Arriva may be valued at up to 3.5 billion euros in a potential deal.