£595m counter-offer for Stagecoach overtakes National Express takeover plans

National Express’s takeover bid for Stagecoach has been blown away by a significantly-higher offer from global investor DWS Infrastructure.

Stagecoach’s board is now recommending shareholders accept DWS’s offer, which is valued at £595m – more than £200m than the current value of National Express’s all-share bid.

DWS’s 105-per-share bid is a cash offer while National Express’s offer, at last night’s closing prices, is now worth 69p per share.

DWS already invests in Yorkshire Water owner Kelda, rolling stock lessor Corelink, and Peel Ports. Its European investments include Belgian public bus operator Hansea.

Hamish Mackenzie, head of infrastructure at DWS said: “Stagecoach is a fantastic business with an exciting future as a central player in a revitalised UK bus and coach market.

“As a long-term investor in essential services with a strong track record in the UK and European transport sectors, DWS Infrastructure will back Stagecoach to rapidly capitalise on the growth opportunities presented by increased public and private investment in UK bus and coach.”

The offer from National Express would have given Stagecoach’s shareholders a 25% stake in the enlarged business.

A possible offer was first mooted in September before a deal was agreed in December that would give 0.36 National Express shares in exchange for each Stagecoach share.

At the time National Express shares were trading at 235p, which increased to above 280p in mid-February.

But soaring fuel prices have resulted in National Express’s shares falling 30% in less than four weeks, and closed last night at 193p. This values Stagecoach at £385m.

Stagecoach chief executive Martin Griffiths said DWS’s offer “presents a major opportunity to maximise the significant growth potential ahead”.

He added: “We believe it will open a new and exciting chapter for Stagecoach, backed by a team who share our vision for a more sustainable future. We also believe it will deliver positive outcomes both now and in the long-term for all of our key stakeholders.”

Stagecoach’s share price rose as expected, to very close to DWS’s offer price, when the markets opened this morning. But National Express’s shares also opened up, rising 10% in early trading.

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