Morning:
13°c
Shares in train and coach company National Express rebounded today as the row over a bid approach from arch-rival Stagecoach escalated.
They crashed nearly 30% on Friday after biggest shareholder, the Spain's Cosmen family, abandoned a 500p-a-share, £1.7 billion rescue takeover. But they were up 27.1p, or 8%, to 389p today after Stagecoach, which with private-equity house CVC was part of the Cosmen consortium, made a fresh approach.
Stagecoach shares fell 11⁄2p to 1551⁄2p. Debt-ridden National Express reacted with fury to the latest approach, saying it would prefer to press ahead with a rights issue to shore up its finances rather than fall into its rival's hands.
The approach also raised questions over whether Takeover Panel rules have been broken. Stagecoach, which runs South West Trains out of Waterloo and East Midlands Trains out of St Pancras, and owns half of Virgin Trains, was banned from launching a bid until the new year after ruling out such a move last month.
It today insisted its offer was submitted “at the invitation of National Express”, which meant no rules were broken.
A National Express spokesman said: “Stagecoach has a different reading of the word invitation'. The approach is not particularly welcome. The preference is to complete the fundraising.”
National Express, which owns Liverpool Street and Fenchurch Street operations serving Essex and East Anglia, said the “highly preliminary proposal” from Stagecoach offered its shareholders “no more than 40% of the enlarged group”. It is thought it wants more, given that it will contribute some 50% of earnings.
