By Scott Wright
NATIONAL Express has made a fresh plea to shareholders in Stagecoach to accept its takeover for the Scottish transport giant – without increasing the value of its proposal.
The Birmingham-based bus company saw its proposed £1.9 billion all-share merger with Stagecoach usurped last week when bosses accepted a cash bid from Germany’s DWS Infrastructure valuing it at £565 million, or 105p per share.
Stagecoach directors signalled their intention to unanimously recommend to shareholders the DWS offer, which in contrast to the National Express deal would see the Scottish company retain its headquarters and jobs in Perth. The DWS offer would also see Stagecoach continue to be led by its senior leadership team, headed by chief executive Martin Griffiths.
However, National Express responded yesterday by declaring the offer from DWS, which is ultimately owned by Deutsche Bank, “materially undervalues” Stagecoach.
READ MORE: Scott Wright: What will twist in Stagecoach takeover saga mean for Scotland?
The company did not increase the value of its offer, but it stated that its approach represents a “superior value creation opportunity” when compared with the deal tabled by DWS.
It urged shareholders to “look through the current period of market volatility and value both National Express and Stagecoach based on their respective fundamentals, strong future prospects and the significant benefits and synergies that the National Express board believes an all-share combination will deliver.”
And it said that its merger proposal would unlock an “illustrative look-through value of approximately 170p per Stagecoach share”, based on the recovery of the National Express share price to a pre-pandemic level of 421p per share.
READ MORE: Stagecoach chiefs accept new bid valuing bus giant at £600m
National Express reiterated that its combination with Stagecoach, under which investors in the Scottish company would own 0.25 per cent of the enlarged business, would allow it to achieve annual cost savings of £45m.
It said that its offer would not result in job losses in frontline operational or depot closures, though it has previously conceded there may be redundancies as a result of duplication in head office, corporate and senior management functions. It identified before that 50 roles could be duplicated.
National Express noted that its offer would see the merged company become a leading multi-modal transport provider in the UK, build scale and relevance in an increasingly “bus-friendly” UK market, expand across large urban areas, and implement leading environmental and sustainability solutions.
Stagecoach did not comment on the statement from National Express yesterday.
DWS, which has investments in Peel Ports and Keda, owner of Yorkshire Water, said last week that its offer would bring “continuity” by retaining Stagecoach’s “well-regarded senior management team”.
National Express proposes that the merged company would be led by its current chief executive Ignacio Garat and chief financial officer Chris Davies. But senior figures from Stagecoach directors would move across. National Express proposes that Stagecoach chairman Ray O’Toole would hold the same role of the merged entity, and that there would places on the board for non-executive directors Gregor Alexander and Lynne Weedall. Carla Stockton-Jones, current UK managing director of Stagecoach, would become managing director of UK Bus at the business.
DWS pledged that it would invest in the Stagecoach fleet as part of the drive to net zero in the UK transport sector.
Shares in National Express closed up 4.6p, or 1.8%, at 236.9p. Stagecoach shares ended just 0.98p, or 0.94%, higher at 105.48p.
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