(Alliance News) - National Express Group PLC on Thursday said it believes its all-share combination with Stagecoach Group PLC remains the better choice after being spurned for a cash offer from DWS Infrastructure.
Last week, Stagecoach walked away from its all-share merger with larger UK peer National Express, opting instead for a GBP594.9 million cash offer from Pan-European Infrastructure III SCSp, an infrastructure fund managed and advised by DWS Infrastructure.
The firm no longer recommends a previously agreed all-share merger with Birmingham-based National Express. That deal, struck back in December, would have created a GBP1.9 billion market-cap public transport provider, though it was being reviewed by the UK Competition & Markets Authority.
DWS will offer Stagecoach shareholders 105 pence in cash. Stagecoach shares were trading at 105.98p on Thursday, up 1.4%.
National Express said it believes the combination is a "superior value creation opportunity" versus DWS's cash offer, adding that it believes the DWS offer undervalues Stagecoach.
The DWS offer represents a discount to Stagecoach's highest share price in 2021 of 108p, hit in April, in a year where public transport operators remained under pressure from the pandemic.
"The National Express board believes the combination provides Stagecoach shareholders with the opportunity to participate fully in the exciting future of the industry and the compelling growth and value creation potential of the combined group, representing a superior value creation opportunity when compared to the DWS offer," the company said.
National Express urged Stagecoach shareholders to take no action in relation to the DWS bid.
"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," said National Express.
It will make further announcements "as and when appropriate."
Shares in National Express were up 1.2% at 235.00p.
By Lucy Heming; lucyheming@alliancenews.com
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