Stagecoach merger creates superior value than DWS offer, says National Express
A merger between rivals National Express and Stagecoach could unlock higher dividends for shareholders compared with DWS’s offer, National Express said today.
According to National Express, a merger could see share value go up to 170p per Stagecoach share – a 66 per cent premium on the 105p offered last week by German asset manager DWS Infrastructure.
The Birmingham-based giant said that joining the two companies would create the UK’s leading multi-modal transport provider, as it would expand across urban areas, combining the two companies’ capabilities in a “best of both worlds” approach.
As part of the proposition, the companies will maintain their distinct brands as well as their own workforce.
The group’s board said that, after the merger, pre-tax cost synergies would generate £45m annually, unlocking a value of more than £500m.
The comments come a few days after Stagecoach snubbed its £445m offer in favour of DWS’s £594.9m.
“We continue to believe that we made a compelling offer for Stagecoach, providing both sets of shareholders with the opportunity to share in the significant value created from both the material synergies of the combination and the future upside of our industry more broadly,” non-executive chairman Sir John Armitt said last Thursday.