Stagecoach Group has made a new approach to National Express, once again raising the possibility that it could be poised to take over c2c and East Anglia as part of a wider deal. National Express Group shares fell sharply on Friday after the Spanish Cosmen family withdrew from negotiations to take over the Group, but Stagecoach has now confirmed that it has since suggested a merger with NXG, saying it was invited to do so by the NXG Board.
A report in the Sunday Telegraph valued the possible value of such a deal at £1.65bn, but National Express has described the approach from Stagecoach as a ‘highly preliminary proposal’.
Had the Cosmen family confirmed its offer, which it had been proposing in partnership with an equity group, Stagecoach was expected to acquire the British operations of National Express with the exception of the long-distance coach services.
NXG also said that the Stagecoach proposal would leave NXG shareholders owning no more than 40% of the combined group. It would be considering the Stagecoach plan, but continue to explore equity fund-raising, ‘in order to see whether the Stagecoach proposal offers greater value and certainty to National Express shareholders’.
National Express interests in Britain include the Midland Metro tram concession as well as the c2c and East Anglia franchises. However, the East Coast franchise is still expected to return to the control of the Department for Transport after NXG warned earlier this year that a default was imminent. ATOC has told Railnews that it expects the transfer of East Coast to take place in December.
The City will now be watching for an interim management statement from National Express, which is due on Thursday.