National Express insists its all-share offer to acquire Perth-based rival Stagecoach is “superior” to a rival cash bid.
Earlier this month the Perth firm accepted an all-cash offer of £595 million for the business.
The offer from German investment firm DWS Infrastructure will save Perth jobs.
In December the Stagecoach board backed an all-share offer from National Express.
It would have given Stagecoach shareholders 25% of the combined group, which would have an overall value of £1.9bn.
But under that merger, Perth head office jobs were at risk.
And a six-month review of head office staff would have also followed the completion of the deal.
It was expected operations would be run from Birmingham.
National Express hits back after rival bid
National Express has said the rival offer “materially undervalues” Stagecoach, but held back from increasing its offer.
The firm said its proposal offers a “superior value creation opportunity” with a so-called potential illustrative look through value of up to around 170p a share for Stagecoach.
Stagecoach said the new deal marks a significant improvement on National Express’s offer, which valued Stagecoach at around £470 million.
The Perth firm, founded by Sir Brian Souter and his sister Ann Gloag, said the DWS deal also offers greater certainty for workers and investors.
National Express said that, while its shares have been hit hard amid the pandemic, a recovery of the stock to pre-Covid levels of 421p a share would see its merger bid represent a 66% premium to the DWS offer.
Takeover would bring ‘best of both’ firms
National Express said the merger of the two companies would “bring the best of both” firms to the tie-up and allow them to expand further in an “increasingly ‘bus-friendly’ UK market”.
It reiterated aims to save at least £45 million a year from the merger.
“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 said.
It urged shareholders to “take no action” in relation to the DWS offer.
Stagecoach had agreed to the National Express deal in December, which would have seen its shareholders take a 25% stake in the enlarged group.
Investigation into National Express deal
But the Competition and Markets Authority (CMA) launched an investigation into the deal.
The CMA served a so-called initial enforcement order in January stopping the firms from combining operations or selling any UK businesses while it investigates.
Stagecoach said it would have been a “long and quite arduous process”.
Stagecoach is going ahead with plans to open a new contact centre at its Dunkeld Road base.
More than 60 jobs were available at a recent recruitment day.
