National Express takeover offer dropped
National Express takeover offer dropped
Friday 16th October 2009
National Express's main shareholders have dropped a £765 million bid to buy the company.The Cosmen family, who own an 18.5 per cent stake in the transport group, had joined private equity group CVC in a joint bid to takeover the firm.
Stagecoach had offered to buy bus and rail operations from National Express if the deal went through.
Shares in National Express fell 26 per cent after the news broke.
The transport company has £1 billion of debt, and will now be hoping the Cosmens follow through with plans to support the company by raising cash from shareholders.
The company became a takeover target earlier this year after it announced the end of an East Coast rail franchise.
In a statement, National Express said: "The group has a strong portfolio of businesses and continues to perform resiliently despite challenging trading conditions. The board believes that National Express has a strong future as an independent listed company, offering a compelling investment case building on the strength of its individual businesses.
"The Cosmen family has now confirmed its intention to support the group's plans to undertake an equity fundraising within certain parameters that the Cosmen family has communicated to the board of National Express.
"The board is consulting with its major shareholders and a further announcement in connection with the potential equity fundraising will be made as and when appropriate."
Bob Crow, RMT general secretary, added: "The collapse of the takeover bid this morning just throws up more uncertainty and instability and now is the time for the government to step in and set an immediate timetable for the renationalisation of East Coast Main Line, East Anglia and C2C.
"The whole fiasco on the East Coast Mainline has turned the spotlight on the continuing chaos of rail privatisation and underlines why over 70 per cent of the British public support renationalisation of our railways."
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