Being reported in multiple UK national newspapers at the moment, the National Express and Stagecoach merger might no longer be in the works.
We were reporting about this not too long ago as the £1.9bn merger prompted an investigation by the Competitions and Mergers Authority and the all-share deal included spinning off the Megabus operation, the South West Falcon and more.
In what is being deemed as a sudden u-turn; Stagecoach are now recommending that the operation should now be a take-over by DWS Infrastructure (Inframobility UK Bidco Limited) in a deal worth 105p a share.
Figures
So the first question would be as an investor, what are the figures? Based on the numbers released by Stagecoach via the Investis portal, this represents:
- 54% more than the price per share the day before the original Stagecoach / Nat Ex announcement
- 37% more than the price per share yesterday
Now, I am not an investment analyst, so I have not got any idea how look-through values work and weightings; but as I understand it the current price of Stagecoach shares suggest that under the National Express deal, that 37% would in comparison be 20%.
[Insert a reminder that this is not financial advice or constitutes an understanding of financial advice here]
[Don’t worry, – the above comment is deliberate and part of the article, not an oversight]
Terms and Conditions
Now, I am not going to go hunting for the specific terms and conditions for the National Express merger proposal, but written into the new agreement is a condition that includes the retention of the Chief Executive Martin Griffiths, Finance Director Ross Paterson and UK Managing Director Carla Stockton-Jones.
For the staff, the press release commits to little change in the frontline and overall head count. Headquarters functions will not change. Stagecoach Group Pension Scheme commitments will also be given.
So what else?
DWS Infrastructure already has an insight into transport operators and is currently involved in the growth and zero-emission-isation of Belgian public bus operator Hansea. The various quotes from the press release would suggest that long-term investment and *oh good God, buzzword time* de-carbonisation of the fleet is a direction for them.
The offer is subject, being a takeover, to a 75% approval by the Stagecoach Group shareholders. In light of their intended recommendation of the Offer by PEIF III Bidco, the Stagecoach Directors have decided unanimously to withdraw their recommendation of the National Express Offer.