Rebel shareholder wins support from second-biggest National Express investor

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Elliott Advisors, a US hedge fund which owns 17.5% of NatEx, said after talks with Spain's Cosmen family - who own 17.4% - that it "expects [they] will vote in favour" of its calls for a boardroom shake-up.

It has tabled resolutions for NatEx's AGM next month to appoint three non-executive directors to the board, which Elliott said needed "fresh thinking". Analysts reckon the activist investor hopes a shake-up will trigger a bid for all or part of the group, enabling it to pocket a big profit.

Working together, Elliott and the Cosmen family, which is represented on the board by deputy chairman Jorge Cosmen, will only need support from investors representing a further 15.1% of NatEx shares for the resolutions to be passed.

Elliott started building its stake in November 2009, at the time of National Express's £360 million emergency rights issue and is thought to have paid an average of 210p per share. Today the shares, which have fallen nearly 8% in the last three weeks, rose 4% or 9.3p to 248.6p.

Shareholders who have pledged allegiance to the NatEx board include the Co-Op, which has a 2.7% stake.

M&G, third on the transport group's investor list, with 13%, is also expected to add its backing, but has not yet publicly confirmed this.

Oriel Securities analysts reported: "It is unhelpful for a long-term shareholder to be at odds with the executive board, especially when the turnaround plan is, if anything, delivering results faster than originally expected."

John Devaney, NatEx chairman, has written to shareholders, including the Cosmens, urging them to reject Elliott's proposals, claiming they were "an attempt to circumvent best corporate governance procedures".

NatEx said it is "holding discussions with all its shareholders about the resolutions submitted by Elliott to next month's AGM and continues to urge them strongly to vote against".