National Express Group PLC (LSE: NEX) confirmed that the CVC Capital Partners private equity group has decided not to make an offer for National Express. Instead the transport company will proceed with an equity based fundraising which media reports put in excess of £300m. Investors and bid speculators will have been disappointed as the National Express share price collapsed, falling over 30% to trade at £3.20 on the open.
In September, a consortium comprising CVC Capital Partners and Spain’s Cosmen family tabled a second proposal to buy the train, bus and coach operator for £5.00 per share.
CVC is a global private equity and investment advisory firm, headquartered in Luxembourg with a network of 19 offices across Europe, Asia and the USA. CVC funds own 52 companies worldwide employing approximately 447,000 people in numerous countries. Together these companies have combined annual sales of €88.0 billion.
As a consequence of CVC’s withdrawal, the planned subsequent deal for selling National Express’s UK bus and rail operation to the Stagecoach Group PLC (LSE: SGC) has also fallen through. In September, Stagecoach said it has reached an agreement of principles with the consortium regarding acquisition of the operations.
Stagecoach this morning confirmed that it is no longer in discussion with the consortium regarding the deal. Stagecoach shares fell 5.8% on the London Stock Exchange this morning.
The Cosmen family has now stated its intention to support the National Express Group in its plan to undertake an equity fundraising within certain parameters that the Cosmen family has communicated to the board of National Express.
National Express said it believes that strengthening the group's balance sheet through an equity fundraising is now the most appropriate course of action. It will consult with its major shareholders and a further announcement in connection with the potential equity fundraising will be made as and when appropriate.