National Express appears to be losing the support of its major shareholder following yesterday’s decision to reject Stagecoach’s merger approach. Spain’s Cosmen Family, which own 18.5% of National Express, said in a statement this morning that they were “disappointed” by National Express’ decision to turn down an offer from Stagecoach.
Yesterday, National Express announced that following an evaluation of the value and certainty of the Stagecoach Proposal, the Board, together with its advisers concluded it is unlikely that a combination with Stagecoach could be successfully executed in 2009. National Express has ceased discussions with Stagecoach and confirmed with the Panel on Takeovers and Mergers it is no longer in an ‘offer period’.
This morning the Cosmen family released the statement to the London Stock Exchange to clarify its position on the decision to reject the Stagecoach proposal. In the statement, the Cosmen family said they were “greatly concerned” with the move claiming that the National Express risk losing further shareholder value by not keeping its options open.
The Cosmen family was a significant part of the CVC Group lead consortium, which walked away from a takeover bid for National Express last month. According to the Cosmen Family, the Stagecoach offer was dismissed too quickly and urged National Express to “seek independent financial and legal advice”.
The statement also noted that National Express is facing short-term issues “that need to be addressed” and that the Cosmen Family have “serious concerns about the absence of a well-defined strategy to address the Company's broader and longer-term issues.” The Cosmen Family believes that the Stagecoach offer could have addressed both the financial and strategic issues facing the Company.
This morning, National Express acknowledged the Cosmen statement and reiterated its plans to pursue it previously announced equity financing.
The Group will now aim to secure the additional equity funding it requires before the end of 2009 through a previously announced rights issue.