NAPERVILLE, Ill. -- The pending $3.6 billion acquisition of Laidlaw International by the British transportation giant FirstGroup continues to raise questions, and considerable speculation, about the future of one of the target companys major holdings - Greyhound Lines.

While FirstGroup has made no secret about the possibility of selling the intercity bus line after the acquisition is complete, theres plenty of conjecture within the U.S. bus industry about whether there would be difficulty finding a buyer.

Observers note that while Greyhound has made substantial progress in turning itself around after several tough years, there appears to be little overt interest among major bus companies or others in taking on the business.

"We just dont see any buyers out there at all," said one industry insider who speaks almost daily with transportation executives across North America.

He said possible buyers could be frightened off by a number of potential problems, including Greyhounds costly labor contracts and expensive property holdings. "That would make the price huge for someone to buy it," he asserted.

In addition, he said stiff competition from intercity upstart megabus.com likely would create further concerns for anyone looking to buy Greyhound.

Speculation about the possible sale of Greyhound surfaced in February, almost immediately after FirstGroup, Britains largest bus operator with more than 9,000 buses and 2.9 million daily passengers, announced it had agreed to buy Laidlaw for $2.8 billion and $800,000 in debt.

"This is one business (Greyhound) where we think owners other than FirstGroup might be able to bring a stronger skill set to its operations," J.P. Morgan analyst Damian Brewer noted at the time. And Bert Powell, a BMO Capital Markets analyst, said at the same time he believed divestiture was "probably in somebodys playbook already."

FirstGroup never discouraged the talk but instead fueled it by saying Greyhound would be a less obvious fit with its operations and it planned to carry out a strategic review of the business after the sale cleared federal regulators and was completed.

In interviews, Moir Lockhead, chief executive of FirstGroup, has emphasized how the acquisition would enhance his companys existing activities in North America where it has about 13 percent of the private school bus market and a number of transit contracts.

Adding Laidlaw and its massive school bus operation to its fold would boost its market share to about 40 percent and make it the largest private school bus operator in the U.S.

Industry executives whove looked closely at the possibility of Greyhound being sold stress that the competition being posed by megasbus.com has become an increasingly important consideration for anyone looking to buy the company.

In April of last year, megabus.com, a subsidiary of Coach USA, began offering low-fare service to 14 Midwest cities from its hub in Chicago. This month, it began service in the Southwest and on the West Coast.

Such expansions, suggest industry experts, could create long-term challenges for Greyhound and any new owners.

While most U.S. observers agree that Greyhound will be tough to sell, at least one financial expert says the companys strong turnaround could produce a surprise buyer.

Powell, the BMO analyst, said Greyhound has done a great job of bringing the company back to profitability and that could make it attractive to a financial buyer or even a management buyout.

"A financial buyer is probably the best bet, but thats just off the top of my head," he said. "As far as a management buyout, the guys there are certainly capable of doing it."

And while there is skepticism in the U.S. that buyers will line up to grab Greyhound, British financial analysts are more sanguine it easily can be sold.

They point out that the long wait to gain regulatory approval of the deal has worked in favor of FirstGroup in a number of ways, but primarily because the weakness of the U.S. dollar has trimmed 100 million British pounds, or more than $200 million, off the cost of buying Laidlaw since the deal was announced in February.

At the same time, FirstGroup has been saving on its bill for interest

charges as a result of a $400 million (U.S.) share placement to help finance the deal.

British followers also believe the delay has helped potential bidders to prepare to launch an offer to buy Greyhound. The British financial press has even speculated that Greyhound could fetch close to $1 billion.

And as long as the dollar keeps sinking, FirstGroup can well afford to accept a lower price for Greyhound, having made out splendidly on the Laidlaw buy.