National Express considering options after being jilted by Stagecoach

Bus and coach group National Express said it is “considering its options” after being jilted by merger partner Stagecoach in favour of a higher rival bid.

National Express remained tight-lipped on any further bid plans after Stagecoach ditched its support for their £1.9 billion tie-up on Wednesday and backed a £595 million takeover by German investment group DWS Infrastructure.

National Express said its board “will update the market in due course”.

The comments came as the group’s results revealed it swung to an underlying profit of £39.7 million in 2021, against losses of £106.1 million in 2020, and forecasted sales returning close to pre-pandemic levels this year.

On a statutory basis, it remained in the red with pre-tax losses of £84.9 million, but this was narrowed sharply from losses of £444.7 million in 2020.

National Express’s merger deal plans were dealt a major blow by Stagecoach’s decision to support a 105p a share cash offer from DWS.

Stagecoach said the new deal marked a significant improvement on National Express’s offer, which valued Stagecoach at around £470 million, while insisting it also offered greater certainty to workers and investors.

Stagecoach had agreed to the National Express deal in December, which would have seen its shareholders take a 25% stake in the enlarged group.

But since then, the Competition and Markets Authority CMA launched an investigation into the deal and served a so-called initial enforcement order in January stopping the firms from combining operations or selling any UK businesses while it carries out the probe.

Stagecoach said it would have been a “long and quite arduous process”.

National Express and the wider transport sector is still recovering from the pandemic and lockdowns, which sent demand plunging.

Passenger growth is returning as workers get back to offices, though soaring fuel prices amid the Ukraine crisis are keeping the sector under pressure.

National Express said while fuel prices have risen “significantly” in recent days, the group has fully-hedged its fuel needs for 2022 and around 65% for 2023.

It added that the rising costs of running a car “has the potential” to boost public transport demand.