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Stagecoach wants Nat Express merger

Source: Reuters - Mon 19th Oct 2009

Bus and rail group Stagecoach confirmed on Sunday it had approached rival National Express about a possible merger.

The confirmation followed a report about the planned all-share merger in The Sunday Telegraph newspaper, which valued the potential deal at 1.65 billion pounds.

In a statement, Stagecoach said that "at the invitation of the National Express board" on October 16, it sent a letter indicating the terms under which it would be prepared to enter into talks about a merger of the two companies.

The approach follows the Friday collapse of takeover talks between National Express and a consortium led by Spain's Cosmen family.

Stagecoach had made a deal with the consortium to buy National Express's UK bus and rail operations if the offer succeeded.

In a separate statement on Sunday, National Express said it had received a "highly preliminary" proposal from Stagecoach that would leave National Express shareholders owning no more than 40 percent of the combined group's stock.

National Express added it would consider the Stagecoach approach but continue to explore an equity fund-raising, "in order to see whether the Stagecoach proposal offers greater value and certainty to National Express shareholders."

In addition, National Express said it had not received a fresh proposal from transport group FirstGroup, which proposed an all-share merger with National Express in June, but walked away in July.

National Express is due to issue an interim management statement on Thursday.

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