Yahoo Finance National Express in talks over Stagecoach takeover
National Express is in talks with rival Stagecoach over an all-share deal that could join up two of the UK’s biggest transport operators.
The tie-up would hand Stagecoach investors 0.36 new National Express shares for each share held, or 25pc of the combined group, according to a statement on Tuesday. That represents an 18pc premium based on respective closing prices, Stagecoach said.
“The potential combination would be a strategically compelling proposition with the potential to realise significant growth and cost synergies, as well as delivering strong value creation for both sets of shareholders,” the bus operator told investors.
Taking over Stagecoach, which has a market value of £375m after its stock sank over the pandemic, could help National Express expand while keeping costs down by sharing infrastructure such as bus depots and routes.
Stagecoach is one of Britain’s largest bus operators, running 8,500 buses and employing 25,000 people. Its co-founders, siblings Sir Brian Souter and Dame Ann Gloag, still hold a combined 25.1pc stake in the company according to its latest annual report.
National Express, which is headquartered in Birmingham, is worth about £1.4bn, with its shares also changing hands at around half their pre-pandemic price. It is the UK’s biggest longhaul coach operator. National Express also runs the US’s second-biggest school bus operation.
Stagecoach exited the UK rail market in 2019 after it was disqualified from bidding for three franchises, including the West Coast line that it had shared with Virgin Trains.
If a takeover goes through, it would mark a reversal of fortunes for the two companies. In 2009, National Express rejected a £1.7bn merger approach made by Stagecoach.
