David Prosser: Adonis still on the hook

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Outlook The only people feeling even crosser than Stagecoach about the collapse of its merger talks with National Express yesterday will have been staff at the Department of Transport, lead by Lord Adonis.

Having stripped National Express of its East Coast Main Line rail contract, the minister has also pledged to take away its East Anglia and c2c franchises, but faces a tough legal battle with the company.

Had the Stagecoach deal gone through, Lord Adonis could have avoided such a row, arguing that he was leaving the franchises with a company that was under new management. But with the merger off, that is no longer an option.

That Stagecoach and National Express are not going to merge does not preclude deals on assets between the two. Stagecoach, or another bidder, could yet buy National Express's rail assets. That was the plan under the original takeover deal for the company, which would have seen Spain's Cosmen family buy it with CVC before selling on the rail assets.

Still, every day that these franchises remain with National Express brings us closer to the time when Lord Adonis will have to act. National Express, leaderless though it is, is still promising a fight.