Darwen Holdings plc has agreed, subject to existing shareholder approval, to acquire Optare's holding company, Jamesstan Investments Ltd, in a £15.95m deal.

Jamestan, controlled by North East businessman Roy Stanley, only bought Optare in March and it recently made the firm's managing director Bob Coombes redundant.

Optare employs around 550 staff and has a turnover of around £60m. It is best known for supplying buses to Stagecoach, Go-Ahead and First Group.

The company is developing hybrid diesel electric buses which do less harm to the environment.

The firm has been looking to move from its HQ in Cross Gates to a new location in West Yorkshire, and Leeds City Council has previously rejected a planning application to build nearly 300 homes on the site. Optare also has a manufacturing plant in Rotherham.

Blackburn-based bus and coachbuilder Darwen has yet to comment on its plans for the Leeds site but it has announced a move to raise approximately £16m through the issue of 40million shares at 40p each to support its purchase.

The firm, which is listed on the Alternative Investment Market, said the placing was necessary "in order to implement the directors' strategy for the enlarged group".

A statement added: "The directors believe that this is a transformational deal, and the executive directors have subscribed to...shares worth £650,000, alongside the institutional investors.

"The directors believe that the proposed acquisition is a compelling strategic fit with the group."

Darwen chief executive, Andrew Brian, said: "Optare, a brand synonymous with top quality service and market-leading products, complements Darwen's existing strong market position.

"This deal is fantastic news for our investors and builds on Darwen's strategic progress to date.

"We are excited about building a stronger and more competitive business, to capitalise on the opportunity to deliver market-leading hybrid public transport solutions and to deliver great results for our customers, business partners and employees."

Optare was formed in 1985 by staff from the former Charles H Roe company, which had been closed by its owners British Leyland the previous year.

The Roe company had been based on the Leeds site since 1923.

The Leeds office of law firm Cobbetts LLP advised Darwen, with the team led by corporate partner, Guy Jackson.

He said: "With the Department for Transport committed to increasing the use of public transport, and the demand for lower emissions technology growing by the day, the future is extremely bright for Darwen."