By Scott Wright
SHARES in Stagecoach dropped by more than three per cent after National Express was given more time under takeover rules to lodge an offer for the Perth-based transport company.
National Express now has until 5pm on November 16 to “put up or shut up” with regard to its approach for the listed Scottish business, which was first announced to the City on September 21.
That was when the two parties disclosed that talks had taken place over an all-share deal, which valued Stagecoach at £445 million.
Shares in Stagecoach shot up 30% to 86.4p on the day the National Express approach was announced and have since remained significantly above pre-approach levels, closing at 82.2p at the close of play on Friday. However, the price fell 2.65p to 79.55p yesterday as investors responded to news of the extension to the offer deadline.
National Express had initially been given until 5pm tomorrow (October 19) to announce a firm intention to make an offer, or walk away.
“Discussions between Stagecoach and National Express have continued, with respective management teams and advisers working constructively to progress reciprocal due diligence,” Stagecoach said in a statement, adding that “there can be no certainty that an offer will be made.”
The statement noted: “A further announcement will be made as and when appropriate.”
Investors in Stagecoach would ultimately own approximately 25% of the merged company, according to details of the potential combination of the two companies announced on September 21. It is forecast that annual savings of at least £35m could be realised from the combination.
The prospect of a deal between Stagecoach and National Express has arisen as transport companies bid to recover from the pandemic.
Government grants worth hundreds of millions of pounds have been poured into the system to ensure essential services could be maintained while the country was in lockdown.
Last week, Stagecoach said passenger numbers had recovered to 70% of pre-pandemic levels by the end of August as it highlighted a “growing confidence to return to public transport”.
It said that the company will continue to receive Covid-19 support until March.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here