Merger talks end at National Express

| October 29, 2009
”Merger

Bus and train operator National Express has confirmed that talks over a possible tie-up with rival bus and rail group Stagecoach have ended.

In a statement yesterday, the company said: “The board has concluded it is unlikely that a combination with Stagecoach could be successfully executed in 2009, even if appropriate terms could be agreed.”

“All discussions with Stagecoach have now ceased,” added the statement.

Stagecoach said it was “extremely disappointed” that National Express had opted not to pursue a merger.

Last week, National Express issued a profit warning and said it would proceed with a £350 million rights issue within weeks to strengthen its balance sheet as it struggles under a mountain of debt totalling almost £1 billion.

The company has been the subject of takeover speculation since it unveiled a loss of £20 million in the first half of 2009 on its east coast route.

Earlier this month, a Spanish-led consortium, which comprised private equity firm CVC Capital and National Express’s largest shareholder, the Cosmen family, withdrew a £765 million takeover offer for the company, sending its shares plummeting 25%.

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