NatEx rejects Stagecoach merger plans
NATIONAL Express last night ruled out a merger with Stagecoach and said that it was pressing ahead with a fundraising.
The transport group said that its board and advisers had decided a merger would not offer greater value and certainty to shareholders.
National Express said last week that Stagecoach had made a “highly preliminary” approach, proposing an all-share deal in which National Express shareholders would own no more than 40 per cent of a combined group.
But concerns over regulatory hurdles and debt deadlines ended up scuppering the deal.
The group has until 31 December to raise new equity and reduce its debt levels, or risk breaching its covenants.
It said in July that its net debt in the six months to 30 June stood at £977m. The group is believed to be looking to raise between £300m and £400m, but further details are expected next month.
National Express and its advisers Merrill Lynch and Morgan Stanley are now working flat-out to ensure an “equity fundraising be undertaken as soon as possible”.
The company could not press ahead with a fundraising while Stagecoach was doing due diligence on its books.
National Express recently rejected an offer from a consortium made up of private equity house CVC and largest shareholder Cosmen