BOARD members of Birmingham based transport group National Express have refused to bow to pressure from a US hedge fund attempting to split off parts of the firm’s North American operation.
Elliott Advisers is trying to garner support from shareholders dissatisfied with the group’s performance for a scheme to exploit growth potential within the US operations by redeploying assets across the Atlantic.
Fearing for their independence, existing board members said that while they shared some of Elliott’s views, they would resist attempts to place all their eggs in the North American basket.
In a statement, National Express said: “The board welcomes views and feedback from all of its shareholders. The board agrees with several of Elliott’s points, including the potential opportunities in North America and other global markets as sources of building long term shareholder value growth. Indeed, the group has a dedicated business development team which is currently pursuing a significant pipeline of bids, tenders and growth opportunities in targeted geographies and markets.
“However, the board disagrees with Elliott that the group does not have an independent future in its existing markets. As the fifth largest Europe-based bus and coach operator, National Express believes that its scale is a significant competitive advantage in a liberalising European market. The board also believes that Elliott’s proposed strategic options are focused on the short term and ignore the group’s superior longer term value creation opportunities.”
The board said it believed the group’s current business model would maximise long term value for shareholders and had already delivered significant performance improvements.
“It links strong performance from the group’s UK Bus and Coach divisions, which achieve good returns from perpetuity, unregulated businesses, with market leading franchise-based operations in Spain and North America,” added the statement.
To strengthen its case for change, Elliott is currently seeking to appoint three new non-executive directors to the board.
However, the hedge fund could find it difficult to get its way as the board has urged investors to reject the appointments when the group stages its annual general meeting on May 10.
