National Express gloom as takeover plan stalls

Oct 17 2009 by Iain Laing, The Journal

Reports suggested concerns among would-be buyers over the refinancing terms for part of National Express’s debt due next year.

But the firm said it continued to perform “resiliently“ despite challenging trading conditions. It is in talks with major shareholders over the fundraising to ease its £1bn debt pile and give the group a “strong, stable platform“.

“The board believes that National Express has a strong future as an independent listed company, offering a compelling investment case building on the strength of its individual businesses.”

The failure of the consortium to complete a deal comes as a blow to rival Stagecoach, which had agreed an outline deal with the suitors to take on National Express’s UK rail and bus business. National Express had been contracted to run the East Coast franchise until 2015, but its expensive bid was derailed as passenger growth stalled and the rail line lost more than £20m in the first half of this year.

The break-up of the group would have seen Stagecoach take on the firm’s East Anglian and c2c franchises, as well as the group’s bus division.

The UK’s biggest transport firm, FirstGroup, was also considering an all-share merger with National Express but pulled out of the running in July.

National Express has 43,000 employees worldwide. Alongside its rail arm the group’s bus business employs around 5,100 people in the West Midlands and Dundee, carrying around 320 million passengers a year.