Stagecoach prepares rail bid

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Stagecoach is putting the final touches to bank financing ready to launch a takeover bid for National Express, the troubled rail franchise which owns the lucrative East Anglian lines.

Andrew Fitchie, a Collins Stewart analyst, said: "Any move will need banks to put up finance. But we understand Stagecoach has between £300m and £400m of finance ready to buy National Express." He added that he hoped Stagecoach would make its move "in the coming week or so". National Express stunned the market last week when it warned that higher costs of debt charges and restructuring its North American bus business would hit profits this year.

Stagecoach refused to comment but takeover hopes were boosted when Jorge Cosmen, National Express's deputy chairman and biggest shareholder with 18 per cent, said last week that he would support an offer. He also indicated that the chairman, John Devaney could stay on if a bid goes through.

Shares in National Express ended the week up 10 per cent at 399p – where it is worth £610m – on hopes of a deal.