Cosmen backs merger with Stagecoach

Published on Tuesday 20 October 2009 21:13

JORGE Cosmen, the largest shareholder in National Express, is backing the proposed merger with Stagecoach it emerged last night.

Cosmen, the firm's deputy chairman, made his view known in a meeting with the board of National Express on Monday.

It is understood that John Devaney, chairman of National Express, has been told he could retain his position at the enlarged group, which would have a market value of 1.7 billion.

Cosmen led a consortium, including private equity group CVC, which abandoned a 765 million proposed offer for National Express on Friday. Perth-based Stagecoach, headed by Brian Souter, was a junior partner in the deal. The offer valued the company at 500p a share.

Under Takeover Panel rules, Stagecoach is prevented from re-entering the bid arena for six months, unless National Express opens the door.

Cosmen's move highlights a division in the National Express board over its future. While the bus and rail group has said it is open to an agreement, it has also stated its preference for a rights issue estimated to be in the region of 300m-350m.

Shares in the company fell 33 per cent on Friday but have since gained ground and closed up 1 per cent at 404.1p last night. Stagecoach shares ended 1.3 per cent higher at 159.1p.