National Express given new 16 November deadline to make firm offer for Stagecoach Group
- The firm previously had a 19 October deadline for the all-share deal
- Stagecoach Group has been valued at £445m under the proposed terms
- ‘Discussions…have continued’ with management working towards a deal
National Express has a new 16 November deadline to make a firm offer for its takeover of Stagecoach Group, which has been valued at £445million under the proposed deal.
The pair first announced that talks were underway in late September with a previous deadline of 19 October for the all-share deal.
National Express and Stagecoach said on Monday: ‘Discussions between Stagecoach and National Express have continued, with respective management teams and advisers working constructively to progress reciprocal due diligence.’
National Express has a new deadline to arrive at a firm bid for Stage Coach
It follows a challenging 18 months for the two firms, which have each been hampered by Covid-19 travel restrictions in their operating territories.
The deal will enable National Express to speed up the expansion of its ‘growth businesses,’ including its private hire coach and corporate shuttle arms, and help it save at least £35million in annual costs.
Under the proposed deal, the FTSE 250 group would control three-quarters of the enlarged company while Stagecoach shareholders would hold the remaining 25 per cent.
These investors would receive 0.36 of National Express shares in exchange for every one share they hold, giving them an 18 per cent premium on Monday’s closing share price.
The combined group would contain a fleet of over 36,000 buses and coaches, and bring brands such as Megabus, Oxford Tube and the Sheffield Supertram light rail service under the auspices of National Express.
National Express shares were driven higher last week after the coach firm reported a strong rebound in demand following the pandemic.
The group said bus passenger numbers in the UK were at 76 per cent of pre-pandemic levels, adding that it had seen ‘no impact’ from recent problems with fuel.
Looking to the wider business, which includes the firm’s operations in North America, Europe and the Middle East, National Express said revenues in the three months to October were at 83 per cent of the levels seen over the same period in 2019
However, National Express was feeling pressure from driver shortages across the industry, noting that its school bus business in North America was only running at 92 per cent capacity.
The group said this was having ‘some impact on revenue’ although it was trying to mitigate the effects of providing emergency driver cover.
National Express shares were down 1.4 per cent in early trading to 232.8p, while Stagecoach shares were down 1.2 per cent to 81.2p.