FirstGroup's bid rejected

City A.M. Reporter
BUS and rail operator National Express has rejected a bid approach from larger rival FirstGroup to create a global giant ferrying millions of American school children and British commuters each day.<br /><br />Britain&rsquo;s FirstGroup, which operates Greyhound buses in the US and ranks itself as the world&rsquo;s leading transport company moving more than 2.5bn passengers a year, said yesterday that National Express had rejected a preliminary all-share approach.<br /><br />The two British groups between them operate some 75,000 yellow school buses in the US or 14 per cent of the 533,000 buses that FirstGroup estimates carry children to and from school in North America.<br /><br />National Express described the advances by its rival as highly preliminary and on unspecified terms and said an internal overhaul currently underway meant it did &ldquo;not consider it appropriate&rdquo; to enter into talks with FirstGroup.<br /><br />The approach was made on 19 June, two days after National Express agreed a deal with its banks to delay a tightening of the terms attached to its loans for six months, as it trys to cut its &pound;1.2bn debt pile.<br /><br />As well as its US school bus operations National Express also carries 320m bus passengers a year in the UK and transports 164m passengers on British train services such as East Coast, East Anglia and Stansted Express.<br /><br />FirstGroup ranks itself as Britain&rsquo;s biggest bus and rail operator, carrying millions of people a day on buses in cities from London to Aberdeen and on train routes such as First Great Western, First Capital Connect and First ScotRail.<br /><br /><strong>JPM CAZ<br />IAN HANNAM</strong><br /><br />FirstGroup was advised in its offer to National Express by JP Morgan Cazenove&rsquo;s (JPM Caz) Malcolm Moir, and its top dealmaker Ian Hannam.<br /><br />Tipped to be the big beast of 2009&rsquo;s bonus pool, Hannam advises on all the City&rsquo;s biggest deals, including the recent Heritage-Genel energy merger.<br /><br />He has secured advisership on the HSBC, Xstrata, Land Securities and SVG Capital cash calls.<br /><br />National Express, meanwhile, is advised by Morgan Stanley and Merrill Lynch.<br /><br />In 2007, after months of fizzling talks about price and value, FirstGroup acquired Laidlaw, owner of Greyhound Lines and the US's largest school bus company.<br /><br />Moir and Hannam were the JPM Caz brokers on the deal.<br /><br />But the company also turned to Davis Polk &amp; Wardwell's Phillip Mills, Marc Williams, Joseph Hadley and John Wright<br /><br />It also used counsels Loyti Chengand Hayden Baker and Slaughter and May's Stephen Powell and Andrew Jolly.