National Express Group PLC (LSE:NEX) urged shareholders in target Stagecoach Group PLC (LSE:SGC) (Stagecoach Group PLC (LSE:SGC)) to "take no action" as it battles with German infrastructure fund DWS for control of the London bus operator, claiming a rival bid "materially undervalues” the company.
Stagecoach last week withdrew its backing for a proposed merger with National Express, which values Stagecoach at £445mln, and instead switched support to a £595mln offer from DWS.
In response, National Express said today its bid offers “a superior value creation opportunity” and DWS’s 105p per share offer “materially undervalues” Stagecoach.
"The board of National Express therefore encourages Stagecoach shareholders to take no action in relation to the DWS offer" a statement said. "Further announcements by National Express will be made as and when appropriate."
National Express said a recovery in its share price to a pre-pandemic level of 421p implies “an illustrative look-through value” per Stagecoach share of around 170p, which represents a 66% premium to the DWS offer.
It said the combination of the two companies would create a leading multi-modal transportation provider in the UK and deliver significant synergies.
“In a period that has seen a surge of private equity firms acquiring British companies, the combination represents a rare example of two UK listed companies combining to form a global leader in their industry,” the statement said.
Shares in Stagecoach gained 1.2% to 105.80p and National Express rose over 2% to 237p in early deals.