National Express Gets Offer from CVC, Cosmen

LONDON (Reuters) – Britain’s debt laden bus and rail operator National Express (NEX.L) has received an all cash offer worth about 600 million pounds ($972 million) from a group led by its main shareholder, as other rivals eye the struggling transport company.

National Express said on Thursday the consortium, which includes Spanish shareholder the Cosmen family and private equity group CVC Capital Partners, had made a revised proposal of 450 pence a share in cash. The bidding consortium does not include rival UK bus and rail operator Stagecoach (SGC.L), a source familiar with the matter told Reuters.

Stagecoach said last month it was in exclusive talks with the consortium about buying some National Express assets if the offer is successful. It declined to comment on Thursday.

Arriva (ARI.L), another UK transport rival, said on Thursday it had also not ruled out joining the bidding.

“We will evaluate the situation and see if there is an opportunity there that we may want to get involved in,” Chief Executive David Martin told reporters at the group’s half year results conference. [ID:nLR377725]

In June National Express rejected an all-share offer from fellow bus and rail operator FirstGroup (FGP.L), which operates Greyhound buses in the United States.

National Express, which is struggling with a debt pile of nearly 1 billion pounds, also reiterated it is discussing a potential equity fundraising with shareholders. The Financial Times newspaper reported that the firm was gauging investors on whether they would prefer a rights issue or a takeover bid.

Its shares were up nearly 8 percent in early trade, but were 3.75 percent higher at 413.5 pence by 1015 GMT, their highest level since January.

Analysts have been saying for some months that a rights issue of around 400 million pounds would be the best way to alleviate the National Express debt problem.

The Cosmen family, who own 18.6 percent of National Express as a legacy of the group’s acquisitions in Spain, said in July they were considering an approach for the group alongside CVC.

National Express, which also school bus services in North America, ran into trouble earlier this year after passenger growth on its flagship East Coast rail franchise failed to live up to hopes, leading to substantial losses.

The group is planning to hand the franchise back to the government later this year, while Chief Executive Richard Bowker has resigned from the company.

By John Bowker

(Additional Reporting by Quentin Webb, Editing by Richard Hubbard)