NATIONAL EXPRESS SET TO REBUFF BIDS
EMBATTLED bus and rail group National Express is planning to shoot down takeover approaches at its half-year results meeting on Thursday, City sources said last night.
The expected rejection comes in the face of last week’s informal approach from National Express’s biggest shareholder, the Spanish Cosmen family, and private equity group CVC, as well as speculation that rival Stagecoach will this week table a bid of its own.
Stagecoach founder and chief executive Brian Souter has appointed Deutsche Bank to put together a takeover proposal, but it is also likely to be rebuffed unless it is prepared to put forward a significant premium to the 400-odd pence per share the Cosmen and CVC team is thought to have offered.
Sources close to National Express chairman John Devaney say he feels the group would be better served by self-help measures such as reducing its debt pile and cost cutting, rather than accepting a proposal that undervalues the group.
“There is always a price, but those being discussed at the moment are far too low,” one told City PM yesterday. “The management feels at the moment that working with what they’ve got is the best option.”
If a £500m or so bid is forthcoming from Stagecoach this week, it will be the third takeover approach received by National Express in just six weeks.
The company announced last month that it had received a “highly preliminary” approach from FirstGroup, adding that it was focused on implementing a number of initiatives to strengthen the group and did not consider it appropriate to enter into takeover discussions.
FirstGroup withdrew the offer last week, just a day before the Cosmen family – led by National Express’s deputy chairman Jorge Cosmen – confirmed it had made an approach backed by CVC. The family, which currently owns 18.5 per cent of the company, traded in its Spanish bus firm Alsa three years ago for a stake in the British group.
National Express has been dogged by further problems over past weeks, including the resignation of its chief executive Richard Bowker earlier this month amid a row with the government over the future of its East Coast rail operations.
Shares in National Express added more than a fifth of their value on Friday to close at 345.75p following news of the Cosmen/CVC approach.
Both National Express and Stagecoach yesterday declined to comment.