Increased offer for National Express

EMBATTLED public transport group National Express has received an increased takeover offer from its largest shareholder, it emerged today.

EMBATTLED public transport group National Express has received an increased takeover offer from its largest shareholder, it emerged today.

The improved offer from the Spanish Cosmen family, backed by buy-out firm CVC, reportedly values National Express at nearly �700 million - close to the value its board is thought to place on the business.

However, National Express directors are understood still canvassing other shareholders on whether to follow up on the offer or to go it alone and pursue a �350million rights issue of new shares as an alternative strategy for reducing its �977million debt mountain.

National Express said today it was evaluating the new offer but added that it was also considering a range of other options.


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According to the Financial Times, fund manager at Schroders, one of the top 10 National Express shareholders, is prepared to back the current management team in the hope of benefiting in the long run following a share issue.

He told the FT: “We would rather go with that certainty than with a venture capitalist bid which will be subject to the normal due diligence conditions they always impose.”

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National Express's problems reached crisis point last month after the group told the Government that it planned to walk away from its loss-making East Coast rail franchise, with its committed funding expected to run out before the end of the year.

The Department for Transport responded with a threat to strip National Express of its two other franchises in the East of England - regional operator National Express East Anglia and south Essex commuter route c3c.

The Cosmen/CVC offer is dependent on both of these franchises, which remain profitable, being retained by National Express.

The Cosmen family first acquired a stake in National Express in 2005 when the group acquired their Spanish coach and bus business Alsa and have since increased it to 18.5%.

Jorge Cosmen is now deputy chairman National Express but is playing no part in the board's discussions in relation to the offer, or alternative strategies.

Under stock market rules, the Cosmen-led consortium has until September 11 to make a firm offer or walk away.

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