National Express bidder is revealed
THE mystery bidder for beleaguered public transport group National Express, which operates most train services in East Anglia, was today revealed to be a partnership between the group's largest existing shareholder and a private equity house.
THE mystery bidder for beleaguered public transport group National Express, which operates most train services in East Anglia, has been revealed as a partnership between the group's largest existing shareholder and a private equity house.
The Spanish-based Cosmen family, which holds an 18.5% stake in National Express, has teamed up with buy-out specialist CVC in a joint approach which reportedly values the group at more than �500million.
FirstGroup, the UK's biggest public transport firm, pulled out of a possible bid for National Express earlier this week, on the grounds of “uncertainties” over its business.
National Express announced at the start of July that it planned 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 - East Anglia and the separate c2c commuter service in south Essex.
As news of FirstGroup's withdrawal emerged late on Wednesday, National Express disclosed that it had received an approach from a second, unnamed party, which was widely rumoured to be bus and train rival Stagecoach.
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However, CVC confirmed a report in the Financial Times that it was behind the approach, together with the Cosmen family, which includes National Express deputy chairman Jorge Cosmen.
CVC declined to comment on the value of the indicative offer, but it is thought to fall short of the 400p a share being sought by National Express, which would value the group at around �620 million.
Stagecoach, together with another public transport rival, Go-Ahead, are both said still to be considering their options but have not yet approached National Express.
The Cosmen family received a 9.9% stake in National Express - to which they have since added - when their bus business Alsa was acquired by the UK group in a �262million deal in 2005.
Besides its difficulties with the East Coast franchise, earnings from which have fallen far short of the premium due to the Government under the deal, National Express also faces a �1.2billion debt mountain, much of its resulting from the takeover of Alsa and a second Spanish business, Continental Auto, in a �450million deal in 2007.
The �40million of funding it has committed to the East Coast franchise is expected to be exhausted by the end of this year, with the DfT in the process of setting up a new company ready to take over the operation until a new franchise can be awarded.