Takeover bid 'not a priority' for National Express shareholders

Published on Monday 2 November 2009 21:06

DOUBTS have been cast on an attempt by Spain's Cosmen family to get institutional shareholders in National Express to back its bid to make the transport group reopen takeover talks with Stagecoach.

It is thought a number of big shareholders instead back debt-laden National's decision to focus on its City fundraising.

One leading institutional shareholder said yesterday: "Time is of the essence for the fundraising. That's where the priority should lie at present, not with merger talk.

"We can have the debate about what is best for National Express after the money is raised. Surely the company will be in a better position then to consider what it should do and whether that could involve a merger?

"But the rights issue will at least stop the banks holding a gun to the company's head."

National is planning a rights issue of between 300 million and 400m. The company faces 5m in penalty interest payments on its near-1 billion of borrowings at Christmas.

The group, which also faces handing back the loss-making East Coast main line to the government by the end of the year, walked away from a tie-up with Perth-based Stagecoach late last week because it feared a deal could not be done by Christmas.

But a source close to the Cosmen family, which holds a near-19 per cent stake in National, said it was trying to mobilise institutional support to get the company to consider all its strategic options. The source said: "The Cosmens are contacting other shareholders to assess their position and test the amount of support they have."

The family, which itself made a recent abortive takeover approach to National as part of a consortium with CVC Capital Partners, said on Friday that the company had failed to carry out a full assessment of its options, in particular the merger proposal from Stagecoach.

However, National insisted yesterday that all talks regarding a possible deal were over.

Although critical of the company's handling of Stagecoach, the Cosmens say they still back the fundraising.