Hedge fund announces intention to sell £120m National Express shares

US-based hedge fund Elliott International is to sell a large stake in Birmingham-based transport group National Express.

Elliott, together with The Liverpool Limited Partnership, has announced it plans to sell almost 50.6m, equivalent to a 9.9% stake, ordinary shares in the transport group.

Markets reacted badly to the news and the group’s shares dropped almost 12% in early trading.

At current prices the shares could net the hedge fund almost £120m.

In a statement to the London Stock Exchange, Elliott said the sale reflected its desire to diversify its portfolio and invest in new opportunities.

However, it added that National Express remained one of its most important investments.
 
“Elliott is a strong believer in National Express’ management team and its strategy for continued outperformance and has confidence in the company’s outlook and future prospects,” it said.
 
Elliott has pledged that it will not make any further disposals from its remaining holding in National Express for a period of at least 90 days.

Following completion of the placing, Elliott will hold approximately 9.9% of the transport group’s issued share capital.
 
The shares being offered for sale will be placed with institutional shareholders through an accelerated bookbuild to be carried out by BofA Merrill Lynch acting as sole bookrunner.
 
The move comes just a week after National Express reported a 9% fall in profits, a situation the company blamed on the Government’s decision to drop its concessionary fare scheme.