Bid interest in East Coast Main Line franchise

Jul 27 2009 The Journal

NATIONAL Express was today facing more bid interest amid speculation that Stagecoach will join the race for the rail group.

The South West Trains firm is considering whether to trump the £600 million offer expected from Spain’s Cosmen family and private equity’s CVC.

According to Sunday newspaper reports yesterday, Stagecoach has appointed Deutsche Bank to draw up plans for an all-share takeover offer. The tie-up would create a group with a significant share of UK transport markets and a strong presence in America.

The bid interest in National Express – which is set to lose its loss-making East Coast rail deal after failing to renegotiate the franchise – began earlier this month with interest from FirstGroup.

The UK’s biggest transport group walked away last week, just as it emerged that the biggest shareholder in National Express – the Cosmen family – had joined forces with CVC to table a proposal. A formal offer could come this week.

Yesterday’s reports said Deutsche Bank has been working on a Stagecoach bid for some weeks, well before the Cosmen interest became public.

If it does not make an offer for the entire company, Stagecoach may yet benefit as the Cosmens and CVC might not be interested in retaining National Express’s UK rail franchises and could attempt to hand them on.