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National Express receives takeover approach

National Express receives takeover approach

National Express Group PLC, the train and bus operator that is handing back its loss-making London-Edinburgh rail franchises to the government, received Thursday a 688.5 million pound ($1.12 billion) takeover approach from its largest shareholder and CVC Capital Partners Ltd.
The offer from CVC and the Cosmen family of Spain, which holds an 18.5 percent stake in National Express, values the company at 450 pence per share.
The stock jumped 6.6 percent to 426.5 pence on the London Stock Exchange after the announcement.
National Express has been targeted for takeover since the government said in July that the company would be stripped of its rail route from London to Edinburgh later this year.
National Express, which is carrying 1.2 billion pounds in debt, had originally been contracted to run the line until 2015, but the business lost 20 million pounds in the first half of this year as customer growth stalled amid the recession.
FirstGroup PLC, the country's biggest transport company, dropped out as a prospective suitor last month, citing warnings from the government that National Express is likely to also be stripped of its other two U.K. rail franchises.
National Express, which has said it intends to retain the two other profitable rail franchises, said it is evaluating the proposal from the CVC consortium. It added that it was considering all options to reduce its borrowing, including a potential equity fundraising with investors, if a takeover is not agreed.
The Cosmen family sold the Spanish coach operator Alsa to National Express in 2005 for a 10 percent stake in the U.K. company and 149 million pounds. The family has continued to build up its stake, and Jorge Cosmen is deputy chairman of National Express' board.
National Express said that Cosmen has not taken part in any board discussions relating to the consortium's approach.