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National Express (NEX)

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Friday 28 August, 2009

National Express

Statement re Possible Offer

RNS Number : 2045Y
National Express Group PLC
28 August 2009

28 August 2009  

National Express Group PLC

Statement regarding possible offer

National Express Group PLC ('National Express' or the 'Group') announced on 27 August 2009 that funds advised by CVC Capital Partners and interests of the Cosmen family (together the 'Consortium') had made a revised proposal to acquire the entire issued and to be issued share capital of the Group for 450 pence per share in cash (the 'Revised Proposal'). 

The Revised Proposal was subject to a number of assumptions and pre-conditions including

  • retention, following a change of control, of the Group's East Anglia and c2c rail franchises and extension of the East Anglia franchise to April 2014;

  • agreement of the Group's actuarial pension funding position with the relevant trustees following a change of control;

  • receiving bank financing on appropriate terms; and

  • satisfactory completion of extensive due diligence.

The Independent Board of National Express considered the Revised Proposal andafter consultation with its advisers and major institutional shareholdershas unanimously rejected it as it undervalued the Group and its prospects

The Independent Board has explored a range of options to accelerate the reduction of the Group's borrowings in a way that will create value for all National Express shareholders. In that context, the Independent Board has discussed a potential equity fundraising with investors.

Jorge Cosmen, Non Executive Deputy Chairman of National Express, did not take part in any Independent Board discussions relating to the Consortium's proposals.


The Independent Board believes that National Express has a strong future as an independent listed company, offering a compelling investment case based around the strength of its individual businesses.

The Group is managing its financial position successfully despite challenging trading

  • Clear focus on addressing leverage to create value for all National Express shareholders

  • Net debt reduced by over £200m during the first six months of 2009, primarily through delivery of sustainable self-help initiatives

  • Prioritisation of cash management has significantly enhanced cash generation through capital investment efficiencies and improved working capital management

The Group is delivering resilient underlying operational performance

  • Portfolio of businesses with market leading positions and resilient contractual revenues

  • Market leading positions in Bus & Coach internationally, delivering resilient profit performance, despite challenging economic conditions

  • UK Bus & Coach, together with Spain, offer robust margins and revenue growth potential 

  • Good initial progress in addressing/improving North America cost performance; further near term opportunities identified

  • Robust UK Rail profit performance (excluding East Coast)

  • Significant further cost saving initiatives identified

  • Cost savings programme on target to deliver £40 million of annualised savings by year end

  • Additional cost efficiencies and productivity improvements in excess of £10 million annually to be delivered by year end

  • Fuel hedge expected to deliver year on year savings of over £25 million in 2010

The Group is executing its strategy to create sustainable shareholder value

  • Refocus on the Group's core business

  • Protect and grow revenue where there is additional value potential

  • Deliver greater cost savings

  • Maximise cash generation through self help management and potential disposal of non-core assets

  • Increased value for shareholders

  • Focus on the organic development of the Group's core Bus and Coach operations in the UK, Continental Europe and North America

  • Stable platform in place for performance delivery and progressive improvement across the Group's Bus & Coach businesses 

  • Investment progressing in step-change Business Transformation programme for North America school bus business

  • Market leading positions from which to develop further growth initiatives 

  • Addressing short-term uncertainties and positioning the Group to fully benefit from a market recovery

  • Strengthening of the balance sheet through an equity fundraising is the key short-term objective to unlock the inherent value of the Group for all shareholders. This will provide the Group with a strong, stable platform to deliver sustainable and
    profitable growth

Commenting on the Independent Board's decision, Executive Chairman, John Devaney said:

'We have consulted with our leading institutional shareholders and given full consideration to the Consortium's proposal, and the Independent Board has now rejected their offer - we believe it fundamentally undervalues National Express and its future potential. We believe that we can create more value for shareholders by remaining independent and refinancing the Group.

'The Group has a strong portfolio of businesses which continue to perform well in a tough environment. We have a clear strategy to strengthen the balance sheet through an equity issue and other actions which will accelerate our debt reduction process and help fund future growth. We will continue to manage our costs tightly and generate cash, whilst continuing to deliver a high quality service for customers.'


As required by the Takeover Code, National Express confirms that this announcement is not being made with the agreement or approval of the Consortium. For the avoidance of doubt, there can be no certainty that the approach by the Consortium will lead to an offer being made for National Express or as to the terms on which any offer might be made.


National Express Group PLC  

Jez Maiden

Group Finance Director

020 7506 4324  

Nicole Lander

Director of Communications

0121 460 8401  


020 7379 5151  

Neil Bennett

George Hudson

Merrill Lynch International

020 7628 1000

Simon Mackenzie-Smith

Simon Fraser (Corporate Broking)

Morgan Stanley & Co. Limited

020 7425 8000

Matthew Jarman

Peter Moorhouse (Corporate Broking)

Merrill Lynch International (a subsidiary of Bank of America Corporation) and Morgan Stanley & Co. Limited are acting exclusively for National Express Group PLC in relation to the possible offer and will not be responsible to anyone other than National Express Group PLC for providing the protections afforded to each of their clients or for providing advice in relation to the possible offer.

In accordance with Rule 19.11 of the City Code on Takeovers and Mergers, a copy of this announcement will be published on National Express' website:

Dealing Disclosure Requirements  

Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of National Express or Stagecoach Group PLC ('Stagecoach'), all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of National Express they will be deemed to be a single person for the purpose of Rule 8.3.  


Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of National Express or Stagecoach by National Express or Stagecoach or by any of their 'associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.  


A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at  


'Interests in securities' arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.  


Terms in quotation marks are defined in the Code, which can also be found on the Takeover Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel.  

This information is provided by RNS
The company news service from the London Stock Exchange