Stagecoach in National Express talks

PUBLIC transport group National Express, whose rail business includes most passenger services in East Anglia, could be broken up if a proposed takeover goes ahead, it emerged today.

PUBLIC transport group National Express, whose rail business includes most passenger services in East Anglia, could be broken up if a proposed takeover goes ahead, it emerged today.

Rival group Stagecoach said it was in “exclusive” talks with the Spanish Cosmen family and private equity firm CVC which last week make a joint approach to the National Express board.

Stagecoach said it had held talks with the Cosmen/CVC consortium with a view to acquiring “certain businesses and assets of National Express” in the event of its takeover going ahead.

However, Stagecoach added that it would “continue to consider all other options”, leaving the door open to a possible takeover bid of its own for the whole National Express group.


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FirstGroup, the UK's biggest public transport firm, last week pulled out of a possible bid for National Express, on the grounds of “uncertainties” over its business.

The interest in National Express follows its announcement earlier this month that it plans to walk away from its loss-making East Coast rail franchise following the failure of efforts to renegotiate the deal with the Department for Transport.

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The Government responded with a warning that the group could also be stripped of its two other rail franchises - National Express East Anglia and the separate c2c commuter service in south Essex.

Stagecoach did no specify which of National Express's businesses were involved in its talks with the consortium - bus, rail or a combination of the two.

Stagecoach currently runs the South West Trains operation but while there would be few barriers to it taking on National Express's remaining rail franchises it is thought that its interest lies in National Express's bus operations in North America and the UK.

The Cosmen family already holds an 18.5% stake in National Express, having become involved in the UK group when it acquired their Alsa bus business in 2005. A second bus company, Continental Auto, has since been added to the Spanish business.

The Cosmen/CVC approach is thought to value National Express at around �500million, well short of the �600million the board is reportedly seeking.

Besides the difficulties with the East Coast franchise - the income from which has fallen far short of the hefty premiums payable to the Government under the deal signed in 2007, before the recession took hold - National Express also faces a �1.2billion debt burden, which the disposal of some businesses would help to clear.

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