National Express has decided not to up its offer for Stagecoach, but still insists its original proposal is superior to that of German asset manager DWS Group.
The two public transport businesses agreed a deal at the end of last year, which valued Stagecoach at around £437m, but the Perth-based business subsequently pulled out after agreeing in March to a new 595m takeover by Pan-European Infrastructure III, a fund managed by DWS.
A stock exchange statement this morning stated that National Express believes the terms of its offer represent a "superior value creation opportunity when compared to the DWS offer", which it argues materially undervalues Stagecoach and the prospects of the recovering sector.
The rival transport company confirmed its proposal for the all-share combination is worth 0.36 times the share price of 250 pence, as of close of business 13 May, representing a 30% premium.
National Express said it would work to build a “leading and globally diversified public transport champion”, unlocking an illustrative value of approximately 174 pence per Stagecoach share.
The possible National Express and Stagecoach tie-up is also being investigated by the Competition and Markets Authority, which served an initial enforcement order in January, stopping the firms from combining operations or selling any UK businesses while it probed the deal.
National Express' statement also argued that its offer would unlock more than £500m in synergies - and that the combination would not result in any job losses across the two businesses.
It would continue to use the individual brands of the companies and would add a balanced board and management team.
It's offer would see Ray O'Toole - non-executive chairman at Stagecoach and former chief operating officer of National Express - become chairman of the combined group, while non-executive chairman and finance director at SSE, Gregor Alexander, and non-executive director Lynne Weedall, joining the combined board.
Stagecoach's UK managing director Carla Stockton-Jones would become managing director of UK buses, with National Express' current chief executive Tom Stables becoming chief executive of UK and Germany.
Stagecoach has until 21 May to decide which offer it will accept.
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