National Express Lets CVC Examine Its Books

LONDON (Reuters) – Spain’s Cosmen family and private equity firm CVC Capital Partners moved a step closer to mounting a formal bid for British transport group National Express (NEX.L) on Friday by gaining access to its accounts.

National Express said in a statement the board had agreed with advisers and major shareholders that the consortium could undertake a level of due diligence to better enable it to make a formal offer currently pitched at 500 pence per share in cash.

An bid at this price would value National Express at about 765 million pounds ($1.28 billion).

A source familiar with the situation had told Reuters on Thursday that price was no longer a “stumbling block” to agreeing a deal and that only the level of due diligence remained to be settled. [ID:nLA686281] The UK Takeover Panel separately said it had extended the deadline for the consortium to make a formal offer or walk away from a deal, to 5 p.m. (1600 GMT) on Sept 25.

National Express became a takeover target earlier this year after struggling to lower a debt pile of almost 1 billion pounds and announcing it would walk away from its flagship East Coast UK rail franchise due to mounting losses.

The Cosmen/CVC consortium improved its offer last week after a 450 pence per share approach was rejected and also struck a side deal to sell National Express’ UK bus and rail operations to rival Stagecoach (SGC.L).

National Express said on Friday that any formal offer would not be conditional on the sale of any businesses to Stagecoach.

It reiterated that should a recommendable offer not be made, an equity fundraising would be its preferred course of action to reduce its borrowings.

Shares in National Express, which have surged 64 percent since it rejected a takeover offer from FirstGroup (FGP.L) at the end of June, closed on Friday at 473.5 pence.

(Reporting by Victoria Bryan and Paul Hoskins)