Stagecoach 'disappointed' by takeover snub

TRANSPORT group Stagecoach reacted with "disappointment" today after National Express snubbed its rival's takeover approach.

Stagecoach proposed an all-share offer, but National Express has broken off talks and pledged to press ahead with its own fundraising plan. National Express said it was "unlikely" that a tie-up with Stagecoach could be achieved this year, even if suitable terms could be agreed.

But its suitor rejected this and added that a merger would have provided benefits for National Express including repairing the firm's relationship with the Department for Transport, which was damaged when it pulled out of the East Coast Main Line franchise.

Stagecoach had submitted a preliminary offer that would have seen National Express take up to 40 per cent of the merged group, worth £1.7 billion.

But National Express has also been working on plans for a rights issue to shore up its balance sheet and ease its £1 billion debt pile and today the firm said this fundraising was its chief aim.