Bid update

National Express insists its Stagecoach offer is ‘superior’

Stagecoach ditched its proposed tie-up with National Express

National Express has urged shareholders in Stagecoach to “take no action” as it claims the rival offer from German infrastructure fund DWS “materially undervalues” the company. 

Stagecoach last week withdrew its support for a merger with National Express, which values Stagecoach at £445m and switched its recommendation to a £595m offer from DWS. 

National Express today argued that its bid represents “a superior value creation opportunity” to DWS’s 105p per share, though it did not offer any sweetener to entice shareholders.

The offer from National Express, announced in December, would have given Stagecoach’s shareholders a 25% stake in the enlarged £1.9 billion business.

In a statement it said: “The board of National Express therefore encourages Stagecoach shareholders to take no action in relation to the DWS offer.”

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It said the combination of the two companies would create a leading multi-modal transportation provider in the UK and deliver significant synergies. 

It says it would implement industry-leading environmental and sustainability solutions whilst also delivering significant benefits to customers and passengers, including on-board technology and safety; scheduling, network and route planning; and congestion management.

The combination “will not result in any job losses in front-line operational roles or depot closures given the minimal direct operational overlap of the two businesses,” it says.

“In a period that has seen a surge of private equity firms acquiring British companies, the combination represents a rare example of two UK listed companies combining to form a global leader in their industry.” 

The DWS offer represents a 37% premium to Stagecoach’s closing share price of 76.55p on 8 March, the day before its offer was lodged.

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