Cosmen clan snubs cash call at National Express
NATIONAL EXPRESS, the struggling transport company, announced plans to raise £360m via a rights issue yesterday – but its main shareholder objected to the plans.
The cash fetched from the fundraising will be used to shore up the group’s balance sheet and pay off its debt pile, after the rail and bus company snubbed takeover approaches.
Jorge Cosmen, who represents 18 per cent shareholder the Cosmen family, voted against the rights issue, saying he did not feel it was in the best interests of the company.
The Cosmens had backed the takeover attempts from rival First Group and a consortium including Stagecoach and private equity house CVC Capital.
The family could lose their seat on the board if they do not support the cash call, but chief operating officer Ray O’Toole has given them two-and-a-half weeks to change its mind.
The Cosmen family backs a rights issue in theory, but said that the cash call – which would cost it £65m – was more than it was prepared to pay.
The rights issue comes at the end of a shaky year for National Express, whose chief executive Richard Bowker quit when the firm was stripped of its East Coast rail line because it defaulted on franchise payments to the government.
SIMON MACKENZIE-SMITH BOA MERRILL LYNCH
THE long-awaited National Express rights issue is fully underwritten by Bank of America Merrill Lynch, Morgan Stanley, Barclays Capital, RBS Hoare Govett, BBVA, BNP Paribas, Commerzbank and HSBC.
BoA Merrill Lynch’s group, led by Simon Mackenzie-Smith, and Morgan Stanley’s team, headed up by Matthew Jarman, are joint lead-underwriters to the deal.
Prolific dealmaker Mackenzie-Smith, who joined Merrill in 1996, was instrumental in establishing the bank’s UK arm, and has been involved in a wide range of mergers and acquisitions and restructurings, including the Punch Taverns fundraising earlier this year.