Stagecoach has dropped its intended merger with National Express after agreeing a £594.9million cash deal with Inframobility UK Bidco Limited, an infrastructure fund managed by DWS Infrastructure.
The bus group has said it has reached an agreement on the terms of a recommended cash offer and no longer intends to recommend the National Express deal announced in December. Under the terms of the offer, DWS will pay 105p in cash for each Stagecoach share, a premium of around 54 per cent on Stagecoach’s closing share price on 20 September, which was the last day before a possible offer from National Express was announced.
DWS Infrastructure has existing UK investments including Corelink, Kelda (Yorkshire Water) and Peel Ports. It has also invested in Belgian bus operator Hansea. DWS Infrastructure says it intends to focus on long-term sustainable value creation through continued capital investment in Stagecoach’s asset base, supporting the management team in delivering the business plan.
It is understood that the deal may involve retaining the Perth group headquarters, something that was likely to disappear under the National Express deal.
Hamish Mackenzie, head of infrastructure, DWS, says: “Stagecoach is a fantastic business with an exciting future as a central player in a revitalised UK bus and coach market. As a long-term investor in essential services with a strong track record in the UK and European transport sectors, DWS Infrastructure will back Stagecoach to rapidly capitalise on the growth opportunities presented by increased public and private investment in UK bus and coach.
“We are focused on supporting Stagecoach and its management team to deliver their strategy for the benefit of passengers, local communities and employees, as well as helping achieve ambitious plans for reaching Net Zero. We are pleased the board of Stagecoach has unanimously recommended our offer and we look forward to working with the existing management team to grow the business sustainably for the long-term.”
Martin Griffiths, chief executive, Stagecoach, adds:
“We believe it will open a new and exciting chapter for Stagecoach, backed by a team who share our vision for a more sustainable future. We also believe it will deliver positive outcomes both now and in the long-term for all of our key stakeholders: the customers and the communities we serve, the people who deliver our high-quality transport services, our partners in national and local government, and the investors who have supported our continued success over many decades.”