From
The Guardian:
New bidder for National Express as First Group pulls out of takeover
National Express was at the centre of fresh takeover turmoil last night after rival transport operator First Group walked away from making a formal offer for the troubled rail and bus group and another unnamed bidder appeared on the scene.
There was intense speculation about the identity of the new suitor, understood be a European private equity company.
First Group, which initially approached National Express in June with proposals for an all-share merger of the two businesses, ditched its plans after its target asked the City's Takeover Panel to impose a "put up or shut up" deadline for it to make a formal offer.
Within minutes of Britain's biggest transport firm announcing its withdrawal, National Express disclosed it had received an approach "in connection with a possible offer for the group from another third party whose intentions are not yet known".
National Express, which is in turmoil following the resignation of chief executive Richard Bowker and its decision to walk away from the loss-making ^1.4bn east coast rail franchise, said in a statement: "There can be no certainty that this approach will lead to an offer being made for National Express, or as to the terms on which any offer might be made."
Under Takeover Panel rules, First Group is now banned from bidding for six months unless a rival offer emerges. The group, operator of the First Great Western rail franchise and yellow school buses in the US, had wanted to do the deal on friendly terms, but was rebuffed.
National Express said at the time it was concentrating on implementing a number of initiatives to strengthen the business and did not consider it appropriate to enter into merger talks.
A merger of the two groups would have created a business carrying more than 1.4 billion bus passengers and 409 million rail passengers in the UK▸ a year.
Sir Moir Lockhead, the First Group chief executive, said last night: "In making a preliminary approach to the board of National Express, our intention was to enter discussions with a view to seeking a recommended merger that would create a significant British transport group, in a stronger position to compete with state-run companies across Europe. We believe this combination would have offered a highly compelling proposition to both sets of shareholders."
First Group said it had decided it would be "inappropriate" to consider a formal offer "at this time" because of the uncertainty facing National Express, which has been warned that the Department for Transport might strip it of its other franchises, East Anglia and c2c, the London to Tilbury and Southend operation.
But it said it reserved its right to return with an offer in the event of a rival bid being made or if it received the backing of the National Express board.
National Express had refused to enter into discussions with First Group even though it does not have a chief executive after the decision by Bowker to depart for the Middle East, and the controversy over the east coast main line.
National Express had been trying to renegotiate the franchise on the London to Edinburgh route ^ for which it had paid ^1.4bn ^ and received the approach from First Group just two days before the dramatic move by the Department for Transport.
National Express was warned by the transport secretary, Lord Adonis, that there might be grounds to terminate its two other rail franchises after it refused to continue funding the east coast line.
The cash-strapped firm had been contracted to run the franchise until 2015, but funding is now expected to run out later this year. The problem with the franchise was that National Express had to pay back to the government a total of ^1.4bn in premiums over the life of the deal. But passenger growth has stalled in the recession and the company was unable to renegotiate the franchise with the DfT» .
Adonis subsequently announced that a new public organisation ^ East Coast Main Line Company ^ would operate the line.
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