Rival walks away from National Express merger as another suitor steps in
TRANSPORT group National Express said today that it has received another takeover approach following rival FirstGroup’s rejection of the chance of pursuing a merger blaming “uncertainty” over the future of its rail operations.
It first emerged last month that bus and train operator FirstGroup had approached National Express about a “friendly and recommended” merger to create a major British transport group that could compete strongly in the US and Europe.
However that was rejected by its rival which subsequently saw its loss-making East Coast rail route – which links Yorkshire with London and Scotland – taken over by the Government after National Express tried to renegotiate the terms of its £1.4bn franchise.
Now there is speculation over the future of its other rail franchises following that decision.
FirstGroup has been contacted by the Panel on Takeovers & Mergers which has received a request for a “put up or shut up” deadline from National Express over the possible takeover.
Given the ongoing issue over the rail franchises, FirstGroup said in a statement: “The board of FirstGroup has considered its position in light of these uncertainties and now believes it would be inappropriate to consider a formal offer at this time.”
Sir Moir Lockhead, deputy chairman and chief executive of FirstGroup, said: “In making a preliminary approach to the board of National Express, our intention was to enter discussions with a view to seeking a recommended merger that would create a significant British transport group, in a stronger position to compete with state run companies across Europe. We believe this combination would have offered a highly compelling proposition to both sets of shareholders.”
National Express said in a statement today that it had not agreed to merger talks with FirstGroup because it was “focused on implementing a number of initiatives to strengthen the group and did not consider it appropriate to enter into discussions”.
“The group subsequently received an approach in connection with a possible offer for the group from another third party whose intentions are not yet known. There can be no certainty that this approach will lead to an offer being made for National Express or as to the terms on which any offer might be made,” it added.
