National Express rejects £700m proposal from CVC consortium

The debt-laden transport company's independent board has said the revised offer undervalues the company.

CVC Capital Partners and Spain's Cosmen family have had a £696 million ($1.1 billion; €797 million) proposal to take over National Express unanimously rejected by the company's independent board.

National Express employs 43,000 workers and operates bus, coach, train, tram and airport transfer services in the UK, US and Spain. The Cosmen family is its largest shareholder, owning 18 percent of National Express.

The transport company's board said the offer of 450 pence per share, which had been revised up from 350 pence per share, was not the best option for shareholders.

“We believe it fundamentally undervalues National Express and its future potential,” said the board's executive chairman, John Devaney. Refinancing its £977 million in debt and remaining an independent, listed company will create better value for shareholders, he added.

This is the third time this year that CVC has had a potential deal dissolve.

In April, the firm had agreed a £3 billion deal to purchase Barclays’ exchange traded fund (ETF) platform, iShares, but that fell through when Barclays later agreed to sell iShares’ parent unit, Barclays Global Investors, to BlackRock in a $13.5 billion transaction.

CVC had also reportedly been eyeing a £2 billon privatisation of the UK’s Royal Mail, but the UK government pulled the plug on selling a stake in the postal service. “When market conditions change, we will return to the issue,” Peter Mandelson, the UK business secretary who fought hard for privatisation, told the House of Lords.

Meanwhile, the private equity firm is also reportedly bidding on Anheuser-Busch InBev's Central and Eastern European operations; should a deal materialise it would be the firm’s first fresh acquisition since closing its €11 billion Fund V in January.