NEX.L Regulatory News (NEX)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

26 January 2022

Recommended Combination between National Express Group plc and Stagecoach Group plc

CMA Update

On 14 December 2021, the Boards of National Express Group plc ("National Express") and Stagecoach Group plc ("Stagecoach") announced that they had reached agreement on the terms of a recommended all-share combination of National Express and Stagecoach, (the "Combination") in accordance with Rule 2.7 of the Takeover Code (the "Rule 2.7 Announcement").

As noted in the Rule 2.7 Announcement, as well as being conditional on approval by both National Express and Stagecoach shareholders, completion of the Combination is conditional, inter alia, on approval from the Competition and Markets Authority (the "CMA").

As part of its consideration of the Combination, the CMA has today issued an interim enforcement order ("IEO") in relation to the proposed Combination (in accordance with section 72(2) of the Enterprise Act 2002), inter alia, preventing National Express or Stagecoach from disposing of material UK assets at the current time. The CMA indicated that the purpose of the IEO is to maintain the businesses in their current shape whilst it commences its review of the Combination.

The IEO will therefore delay completion of the proposed sale of the marketing, retail and customer service activities of Stagecoach's inter-city coach businesses to ComfortDelGro Corporation Limited ("CDG"), which was also announced on 14 December 2021 (the "Stagecoach Coach Disposal"), beyond the previously expected completion date of 28 February 2022. However, the Boards of National Express and Stagecoach continue to believe the Stagecoach Coach Disposal represents a comprehensive solution to any competition concerns that might arise from their overlapping coach operations and will engage with the CMA to allow the Stagecoach Coach Disposal to complete as soon as possible.

We do not expect the IEO to materially affect the day to day operations of either National Express or Stagecoach, and the parties will continue to work with the CMA in relation to its review of the Combination. At this stage, the Boards of National Express and Stagecoach continue to expect the Combination to complete around the end of 2022.

A further statement will be made as appropriate.

The person responsible for arranging the release of this announcement on behalf of National Express is Jennifer Myram, National Express Company Secretary. The person responsible for arranging the release of this announcement on behalf of Stagecoach is Michael Vaux, Stagecoach Company Secretary.

Enquiries

Stagecoach

National Express

Advisers

Important Information

Capitalised terms used but not defined in this announcement shall have the meanings given to them in the Rule 2.7 Announcement.

This announcement is for information purposes only and is not intended to and does not constitute or form part of an offer, invitation or the solicitation of an offer or invitation to purchase, or otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Combination or otherwise nor shall there be any sale, issuance or transfer of securities of National Express or Stagecoach pursuant to the Combination in any jurisdiction in contravention of applicable laws. The Combination will be implemented solely pursuant to the terms of the Scheme Document (or, in the event that the Combination is to be implemented by means of an Offer, the Offer Document), which will contain the full terms and conditions of the Combination, including details of how to vote in respect of the Combination by Stagecoach Shareholders. Any decision by Stagecoach Shareholders in respect of, or other response to, the Combination should be made on the basis of the information contained in the Scheme Document and the Prospectus.

National Express will prepare the Circular to be distributed to National Express Shareholders and will also publish the Prospectus containing information on the New National Express Shares and the Combined Group. Stagecoach and National Express urge Stagecoach Shareholders to read the Scheme Document and the Prospectus carefully when they become available because they will contain important information in relation to the Combination, the New National Express Shares and the Combined Group.

National Express urges National Express Shareholders to read the Prospectus and the Circular carefully when they become available.

Any vote in respect of resolutions to be proposed at the Stagecoach Meetings or the National Express General Meeting to approve the Combination, the Scheme or related matters, should be made only on the basis of the information contained in the Scheme Document (in the case of the Stagecoach Shareholders), the Prospectus and the Circular (in the case of the National Express Shareholders).

This announcement does not constitute a prospectus or prospectus equivalent document.

Information Relating to Stagecoach Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by Stagecoach Shareholders, persons with information rights and other relevant persons for the receipt of communications from Stagecoach may be provided to National Express during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code.

Overseas Jurisdictions

The release, publication or distribution of this announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Stagecoach Shares with respect to the Scheme at the Court Meeting, or to execute and deliver forms of proxy appointing another to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law the companies and persons involved in the Combination disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Unless otherwise determined by National Express or required by the Takeover Code, and permitted by applicable law and regulation, the New National Express Shares to be issued pursuant to the Combination to Stagecoach Shareholders will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Combination by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and any formal documentation relating to the Combination are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of that jurisdiction, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Combination. If the Combination is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of New National Express Shares pursuant to the Combination to Stagecoach Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements. Stagecoach Shareholders who are in doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Further details in relation to Stagecoach Shareholders in overseas jurisdictions will be contained in the Scheme Document.

The Combination will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange and the Financial Conduct Authority (the "FCA").

Additional Information for US Investors

The Combination relates to the shares of a Scottish company and is proposed to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 that will be governed by Scots law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Combination is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of United States tender offer and proxy solicitation rules. If, in the future, National Express exercises the right to implement the Combination by way of an Offer and determines to extend the Offer into the United States, the Combination will be made in compliance with applicable United States laws and regulations. Financial information included in this announcement and the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

It may be difficult for US holders of Stagecoach Shares to enforce their rights and any claim arising out of the US federal laws, since Stagecoach and National Express are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Stagecoach Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

The New National Express Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act and such other laws. It is expected that any New National Express Shares to be issued pursuant to the Scheme would be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Securities issued pursuant to the Scheme will not be registered under any US state securities laws and may only be issued to persons resident in a state pursuant to an exemption from the registration requirements of the securities laws of such state.

Important Notices Relating to the Financial Advisers

Deutsche Bank is a joint stock corporation incorporated with limited liability in the Federal Republic of Germany, with its head office in Frankfurt am Main where it is registered in the Commercial Register of the District Court under number HRB 30 000. Deutsche Bank is authorised under German banking law. The London branch of Deutsche Bank AG is registered in the register of companies for England and Wales (registration number BR000005) with its registered address and principal place of business at Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank is authorised and regulated by the European Central Bank and the German Federal Financial Supervisory Authority (BaFin). With respect to activities undertaken in the UK, Deutsche Bank is authorised by the Prudential Regulation Authority ("PRA") with deemed variation of permission. It is subject to regulation by the FCA and limited regulation by the PRA. Details about the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the FCA's website. Deutsche Bank is acting exclusively as financial adviser to Stagecoach and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Stagecoach for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the subject matter of this announcement or any other matter referred to in this announcement.

RBC, which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom and is a wholly owned subsidiary of Royal Bank of Canada, is acting for Stagecoach and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Stagecoach for providing the protections afforded to clients of RBC, or for providing advice in connection with matters referred to in this announcement. Neither RBC nor its parent nor any of its subsidiaries or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of RBC in connection with this announcement or any matter referred to herein.

BofA Securities, which is authorised by PRA and regulated by the FCA and the PRA in the United Kingdom, is acting as financial adviser exclusively for National Express and for no one else and will not be responsible to anyone other than National Express for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement. Neither BofA Securities, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BofA Securities in connection with this announcement, any statement contained herein or otherwise.

HSBC, which is authorised by the PRA and regulated in the United Kingdom by the FCA and the PRA, is acting as financial adviser to National Express and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than National Express for providing the protections afforded to clients of HSBC, or for providing advice in connection with the matters referred to herein. Neither HSBC nor any of its group undertakings or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of HSBC in connection with this announcement or any matter referred to herein.

Cautionary Note Regarding Forward Looking Statements

This announcement (including information incorporated by reference into this announcement), oral statements regarding the Combination and other information published by National Express and Stagecoach contain certain forward looking statements with respect to the financial condition, strategies, objectives, results of operations and businesses of National Express and Stagecoach and their respective groups and certain plans and objectives with respect to the Combined Group. These forward looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of National Express and Stagecoach about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward looking statements. The forward looking statements contained in this announcement include statements relating to the expected effects of the Combination on National Express and Stagecoach, the expected timing and scope of the Combination and other statements other than historical facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by National Express, and/or Stagecoach in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements. Although it is believed that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and readers are therefore cautioned not to place undue reliance on these forward looking statements.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. For a discussion of important factors which could cause actual results to differ from forward looking statements in relation to National Express Group or Stagecoach Group, refer to the annual report and accounts of National Express Group for the financial year ended 31 December 2020 and of Stagecoach Group for the financial year ended 1 May 2021, respectively.

Each forward looking statement speaks only as at the date of this announcement. Neither National Express nor Stagecoach, nor their respective groups assumes any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website

A copy of this announcement is and will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on National Express's website https://www.nationalexpressgroup.com/investors/possible-combination/ and on Stagecoach's website http://www.stagecoachgroup.com/investors.aspx by no later than 12 noon (London time) on the Business Day following this announcement. For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.