Rivals consider fresh move for rail National Express

Oct 19 2009 by Peter McCusker, The Journal

TRANSPORT groups Stagecoach and FirstGroup are mulling approaches for embattled rival National Express after its £765m sale talks collapsed last week, according to new reports.

Stagecoach was said to be seeking backing from the National Express board for a £1.7bn merger proposal.

The operator of South West Trains and East Midlands Trains saw its plans to take on National Express’s UK rail and bus business dashed when the Spanish Cosmen family and private equity firm CVC abandoned takeover talks late last week.

A report in the Sunday Telegraph suggests the renewed interest from Stagecoach has also prompted FirstGroup to reconsider an offer for National Express despite walking away from the takeover tussle in the summer.

FirstGroup advisers are understood to have been in contact at the weekend with National Express sounding the group out for potential support, as the firm cannot make an uninvited offer.

Its decision to back out in the summer prevents it from making an unsolicited bid for six months under City takeover rules.

Stagecoach and FirstGroup both declined to comment on the speculation, although a spokeswoman for FirstGroup said its position remained the same as it did in July when it withdrew from the running citing “uncertainty” around National Express.

National Express was thrust back into the takeover spotlight last week when the Cosmen consortium pulled out, sending shares slumping by 23%.

The Cosmens, the largest shareholder in National Express, had been working on a potential deal since July. There were concerns among would-be buyers over the refinancing terms for National Express’s debt pile.