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UK's National Express spurns bid from Stagecoach

UK's National Express spurns bid from Stagecoach

British bus and train operator National Express PLC said Thursday it had broken off talks with potential suitor Stagecoach Group PLC, and said it will press ahead with its own plans to raise new capital.
The announcement sent National Express shares falling 15 percent to 310 pence ($5.07) as the London Stock Exchange opened. Stagecoach shares were down 1.3 percent at 143 pence ($2.34).
National Express, a major school bus operator in North America, the biggest bus operator in Spain and holder of three rail franchises in Britain, said it would announce its fundraising plans in November.
National Express had invited an offer from Stagecoach, which has two rail franchises in Britain and had previously shown interest in acquiring National Express' British rail and bus franchises.
Stagecoach proposed an all-shares takeover, which would have left National Express shareholders holding no more than 40 percent stake in the enlarged company.
National Express said its board has concluded that it was unlikely that a combination with Stagecoach could be completed this year, "even if appropriate terms could be agreed."
Stagecoach said it was disappointed, and believed that its proposal was "a compelling strategic and financial proposition for a combination which would have represented a unique opportunity to deliver incremental value for both sets of shareholders."
It was the second time this year that National Express had been wooed. The Cosmen family, which holds a 17.5 stake in the company, had joined with private equity to explore a takeover, but announced on Oct. 16 they would not make a firm offer.
National Express has been targeted for takeover since it announced in July that it expected to default on its franchise to operate rail passenger services between London and Edinburgh. The company, which is carrying 1 billion pounds ($1.63 billion) in debt, had originally been contracted to run the line until 2015, but the business lost 20 million pounds ($33 million) in the first half of this year because the recession had depressed traffic.
Still unresolved is the government's threat to also take away National Express' two other rail franchises in Britain, both of them profitable.
Stagecoach had been lined up to buy National Express's British rail and bus business under the plans drawn up by the Cosmens and buyout firm CVC Capital Partners Ltd.
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On the Net:
http://www.nationalexpressgroup.com
http://www.stagecoachgroup.com


Updated : 2021-04-23 07:15 GMT+08:00