National Express’s plans for a rescue rights issue were thrown into chaos this evening when its biggest shareholder, Spain’s Cosmen family, which holds a 19 per cent stake, decided to back rival Stagecoach’s takeover bid for the group.
The decision in effect removes the Cosmens’ support for the indebted company’s cash call, which National Express had been expected to unveil on Thursday.
The Cosmen family, along with Stagecoach and private equity group CVC pulled out of a deal to buy National Express for 500p a share last Friday, after disagreements about the speed with which the bus and rail operator can turnaround its flagging US business. There have also been grave concerns about the company’s £1bn debt pile, its lack of a chief executive and the precarious position of its two remaining rail franchises, East Anglia and e2e.
National Express confirmed on Monday that Stagecoach had made an individual approach for the group over the weekend, under which Perth-based Stagecoach would control at least 60 per cent of a combined company, following an all-share takeover. Jorge Cosmen, National Express’s deputy chairman, is understood to have told a board meeting that his family would support the Stagecoach approach.
A spokesman for National Express refused to comment last night, but even as late as Monday afternoon, the company insisted that the rights issue was its “plan A”. On Friday, the Cosmen family said it support the rights issue “within certain parameters”.
Under Takeover Panel rules Stagecoach would need the agreement of the National Express board before a takeover.
National Express has been in disarray since July when it handed back its East Coast main line rail franchise, arguing that it could not make the line profitable. At the same time, Richard Bowker quit as chief executive, a post which remains unfilled, to take a more lucrative job in Abu Dhabi. National Express also has £1bn of debt.
The Transport Secretary, Lord Adonis, is thought to be unhappy that the company is holding on to its profitable East Anglia and e2e rail networks, and is considering a move to take the services back under state control.Reuse content