TRANSPORT giants Stagecoach and FirstGroup were last night understood to be considering approaches for bus and rail operator National Express after its £765 million sale talks collapsed last week.
Brian Souter, the chief executive of Stagecoach, has begun sounding out leading shareholders of National Express, to gauge their support for an all-share £1.7 billion merger.
The operator of South West Trains and East Midlands Trains saw its pl
ans to take on National Express's UK rail and bus business dashed when the Spanish Cosmen family and private equity firm CVC abandoned takeover talks last Friday.
The renewed interest from Stagecoach has also prompted FirstGroup to reconsider an offer for National Express despite walking away from the takeover tussle in the summer.
FirstGroup advisers are understood to have contacted National Express at the weekend to sound the group out for support, as FirstGroup's decision to back out in the summer prevents it from making an unsolicited bid for six months under City takeover rules.
Stagecoach and FirstGroup declined to comment.
National Express was thrust back into the takeover spotlight last week when the Cosmen consortium pulled out, sending shares slumping by 23 per cent. The Cosmens, the largest shareholder in National Express with 18.5 per cent, had been working on a deal with buy-out firm CVC since July. Reports suggested the would-be buyers were nervous about the refinancing terms for part of National Express's debt due next year.
National Express pledged to refocus on plans for a fundraising to ease its £1bn debt following the consortium's decision. But the rights issue aims could be derailed again if its suitors once more enter the fray.
As with FirstGroup, City takeover rules also require Stagecoach to secure backing from the National Express board, because it said last month it would not bid alone for the firm.
Under the Cosmen and CVC deal, Stagecoach would have taken on the company's East Anglian and c2c franchises, plus its bus division.
National Express has been a takeover target since revealing the impact of recession on its rail business. The company is due to hand back its loss-making East Coast main line franchise, for which it paid too much at the height of the boom, to the government by the end of the year.
National Express had been contracted to run the East Coast franchise until 2015, but passenger growth stalled and the rail line lost more than £20m in the first half of this year.
National Express has 43,000 employees worldwide. Alongside its rail arm the group's bus business employs around 5,100 people in the West Midlands and Dundee, carrying around 320 million passengers a year.
The group's coach operation has 1,800 staff and carries more than 18 million passengers a year.
