German transport company Deutsche Bahn is considering an IPO of its subsidiary Arriva whereby the company would be listed on Euronext Amsterdam. Bloomberg reported this on Monday evening based on insiders.

Deutsche Bahn is said to have recently submitted a prospectus to the Authority for the Financial Markets. An IPO is a potential alternative to an Arriva sale, if it doesn't yield enough, the sources said. The sales process would start this week with a first round of bids.

The choice for Euronext Amsterdam, should it still go public, is due to the faster growth of Arriva in mainland Europe. Today more than half of the profit comes from here. In 2010, when Deutsche Bahn took over the British company, that was only a fraction.

Arriva is active in 14 countries, including the Netherlands.

In March, Deutsche Bahn announced plans to sell Arriva, using the proceeds to pay off debt and invest in the German infrastructure network. According to the sources, Deutsche Bahn hopes with a possible sale of Arriva certainly to make a profit compared to the book value of around 2,2 billion euros.

Deutsche Bahn declined to comment on the message, Bloomberg said. It should be clear by mid-September whether Deutsche Bahn will be selling Arriva or will continue to plan for an IPO.

By: ABM Financial News.