Perth -based transport giant Stagecoach has become the centre of a bidding war after National Express launched a last-ditch effort to save its takeover plans following a rival bid from a German asset manager.
The initial £450 million offer for the local bus operator was initially welcomed in December, until last week it was gazumped by a 105p a share £595 million cash deal from German group DWS Infrastructure.
The new proposition to join with DWS, a division of Deutsche Bank, was welcomed by local politicians but will still have to be approved by shareholders.
The Stagecoach board believes the move will bring “certainty” to employees over their future, as overall headcounts are expected to remain the same under the deal.
It is understood the board sees Stagecoach as “an excellent fit” with DWS and the new £595 million deal as an opportunity to give the company access to “significant capital” to invest in its services going forward.
But perhaps most importantly the takeover means Stagecoach’s current headquarters in Perth will be retained, instead of moving to the National Express HQ in Birmingham.
Perthshire North MSP John Swinney was pleased that the new proposal suggested “a clear commitment” to retain Stagecoach’s Perth headquarters.
Perthshire South and Kinross-shire MP Jim Fairlie added that the plan to move the Stagecoach HQ to Birmingham “would have been a great loss to the city of Perth”.
On Thursday, however, National Express hit back at DWS claiming its own deal offered a “superior value creation opportunity” that potentially valued the business at 170p a share.
A spokesperson added: “In a period that has seen a surge of private equity firms acquiring British companies, the combination represents a rare example of two UK listed companies combining to form a global leader in their industry.”
National Express believes DWS’s swoop “materially undervalued” Stagecoach but has not as of yet sweetened its own offer, which would hand Stagecoach’s investors 25pc of the combined company.
The spokesperson added that the merger would “provide Stagecoach shareholders with the opportunity to participate fully in the exciting future of the industry” at a time when the government is putting more emphasis on bus travel as the UK clamours to reach ambitious environmental targets.
DWS has rejected this label, saying it is an infrastructure fund.
National Express has seen its shares hit hard during the pandemic, but says that a recovery would see the value of its offer jump for shareholders new and old.
Its offer of 0.36p in National Express shares is worth about 85p a share now, well below the DWS cash bid.
It urged Stagecoach shareholders to “look through the current period of market volatility” and value the companies on their fundamentals and “strong future prospects”.
Combining Stagecoach and National Express would create a business with 70,000 workers and 40,000 vehicles.
Stagecoach, which was founded in 1980 by Sir Brian Souter and his sister Dame Ann Gloag, is UK-focused and is Britain’s biggest bus and coach operator.
