National Express backer calls for a shake-up in boardroom

National Express failed to get on the short lists for either the West Coast or Greater Anglia rail franchises despite the fact it currently runs the latter one. Dutch and French rail companies made it onto those shortlists.

Elliott Advisers, which owns 17% of National Express and is the second largest shareholder, is putting up three new independent directors to be elected at May's annual meeting who it says will "provide a fresh perspective and strategic outlook, designed to cpature exciting growth opportunities."

It was not immediately clear whether Elliott has the backing of National Express' largest shareholder the Cosmen family who sold their Spanish coach business to the UK firm in 2005.

Jorge Cosmen, deputy chairman of National Express, used the family's near 20% stake to oppose the group's £360 million rights issue in 2009 at first before finally supporting it.

Elliott said: "We see exciting opportunities for National Express in the transport sector and believe existing management has done a commendable job in turning the company around. National Express faces fierce competitive pressures from European state players who have both strong balance sheets and low costs of capital. In particular in the highly competitive UK transport market, we expect the company to be increasingly at a significant disadvantage."

The three directors put up by Elliott are Spanish banker Javier Alarco Canosa, entrepreneur Marc Meyohas and Swiss transport expert Chris Muntwyler. Elliott said it would vote against the re-election of Roger Devlin the former investment banker who has been non-executive director since 2007.

Elliott said it has no financial involvement with any of the propsed new directors.

It told National Express shareholders in a letter: "Now is the time to look to the next phase in the company's future, as we believe National Express requires a fresh assessment of its growth opportunities and the positioning of its assets."

But the fund manager also made it clear its supports National Express' current management and stated: "Our significant shareholding is testament to our belief in the inherent value of National Express."

National Express had no immediate comment but is understood to have turned down Elliott's proposals in earlier private talks. Elliott said it was still prepared to continue talking to National Express ahead of the shareholders meeting on May 10th.