National Express has been plunged into uncertainty after a takeover deal from a Spanish group was withdrawn. Shares fell by more than a quarter on the news that the consortium headed by the Cosmen family had decided not to go ahead with a £765m purchase which had valued National Express at £5 a share.

The development means that the future of the c2c and East Anglia franchises is again in doubt. Had the deal gone ahead, Stagecoach was poised to take over most of the British operations of National Express, with the exception of the East Coast franchise, which is to return to DfT control, and the long-distance coach business. However, Stagecoach said it was ‘no longer in discussion with the Consortium regarding the possible acquisition by Stagecoach from the Consortium of the UK Bus and UK Rail operations of National Express’.

Cosmen, which owns 18.6% of NX, had been working in partnership with equity group CVG. Its particular interest was the Spanish coach businesses which NX acquired from the Cosmen family several years ago.

The way forward now appears to be a fresh attempt to strengthen the balance sheet by a new share offer.

The East Coast franchise is still set to return to the DfT before the end of the year, but question marks remain over the future ownership of the East Anglia and c2c franchises. The Transport Secretary Andrew Adonis has already talked of using the cross-default clause in the East Coast contract to terminate these franchises as well, but opinion is divided on whether such an action would succeed. 

 

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