National Express has confirmed that it is considering making an offer to buy Stagecoach. If completed, the deal will deliver “significant operational efficiencies across the combined networks” and accelerate the expansion of National Express’s key growth sectors, including into the corporate, shuttle and private hire coach market, it says. Combination of the two groups would also position the resulting business well in an evolving bus industry landscape.
Under the terms of possible all-share combination, Stagecoach shareholders would receive 0.36 new National Express ordinary shares for each Stagecoach ordinary share. That would result in them owning approximately 25% of the combined group.
National Express has until 19 October to either announce a firm intention to make an offer for Stagecoach or to withdraw, although that deadline can be extended. Any deal would be subject to regulatory and merger control approval.
In a statement, National Express says that combining the two businesses would, among other things, accelerate the expansion of its National Express Transport Solutions (NETS) business, along with its accessible transport operation, “across Stagecoach’s UK footprint.” NETS was launched in July 2020 with a bullish message that it would “stand apart from the rest of the market.”
There have been rumours but this time its real. It remains to be seen if it goes ahead but it will certainly shake things up a bit. The big question though is will the competition people be happy with National Express taking over Megabus – its only true national competitor?
Do people think this would be good for either National Express or Stagecoach? I personally would welcome it as Stagecoach does seem in need of a bit of a shake up at the moment.
Personally I think Stagecoach is a bit stagnant at the moment so a National Express takeover could be good both locally and Nationally
ReplyDeleteCovid hasn’t given them a choice. Stagecoach have had to be stagnant unfortunately
DeleteGuess that would be the end of Megabus so no more cheap fares as National Express would have no competition.
ReplyDeleteI would have agreed with this view until recently, but FlixBus are now saying that they have big plans for long-distance coaches in the UK. Whether or not this actually happens is anyone's guess, but it could give NatEx enough to point at as 'competition' if the Competition Commission (or whatever they're called these days) come round to call.
DeleteAlternatively NatEx could just give an undertaking to sell Megabus to a competitor before the takeover is completed.
Interesting how Stagecoach have gone from predator to prey though.
Flixbus are the wildcard that may make the takeover acceptable. They are well-funded and multi-national and entered the market with the publicly stated intention of becoming the largest operator in the market in less than 5 years (and are expanding fast) so even if the merger happened National Express couldn't afford to ease off as that would just create the gap for Flixbus - in fact National Express have reacted hard to Flixbus with cheap fares whilst Megabus have refused to be join in the price war.
DeleteFlixbus seem pretty keen to expand in the UK.
DeleteI personally think this is an awful idea national express run buses in the midlands and they are a total failure they have high costs and there management is awful as well as late buses (if they even show up) these were issues pre-covid as well so don't go blaming that
ReplyDeleteI must have been to a different West Midlands then as I got the impression the buses were well-run, with good value fares and tickets and a comprehensive network. Late buses are surely down to traffic delays and a lack of bus priority which are not the responsibility of NXWM management.
DeleteAs a West Midlands resident myself, I agree with Julian.
DeleteI see the rationale behind this takeover as preparing a strong bulwark against the threatened expansion by Flixbus. They have made no secret of their ambition to create a network of coach services across Britain, as they have already managed successfully in Europe. National Express cannot afford to stand still against this threat and the network of depots used by Stagecoach could be a valuable asset to assist a counter attack by Nat Express.
ReplyDeleteIt will be interesting to see what happens to Falcon, as well as the Megabus network.
Stagecoach has lost the plot so can this be any worse?!
ReplyDeleteWhat about Flixbus? Surely they will be competition.
ReplyDeleteStagecoach have become rubbish with expensive fares. National Express can't run any business properly so merging with Stagecoach won't do anything I doubt it will even be allowed.
ReplyDeleteTravel all day for £3 with very frequent buses from 5am to 1am 364 days a year with new Platinum buses. I have to have admit its hell to have to use West Midlands Travel Limited every day as I do..........
ReplyDeleteCould be interesting to see what happens with Stagecoach and National Express - ideally it would lead to better services and connections but again the proof would be in whats actually delivered if the merger actually happens.
ReplyDelete