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UPDATE 2-Cosmens push National Express on Stagecoach-source

Published 11/02/2009, 08:54 AM
Updated 11/02/2009, 08:57 AM

* Cosmen family gauging support from other shareholders

* Still back rights issue

* National Express says all talks with Stagcoach are over

* National Express shares down 0.2 percent

(Adds more Cosmen, National Express comment, updates shares)

By Rhys Jones

LONDON, Nov 2 (Reuters) - Spain's Cosmen family is gauging the appetite among other National Express shareholders for pushing the British bus operator to restart merger talks with Stagecoach, a source close to the family told Reuters on Monday.

Debt-laden National Express walked away from a tie-up with Stagecoach late last week because it feared a deal could not be done by Christmas, when it faces 5 million pounds in penalty interest payments on its near 1 billion pounds of borrowings.

The Cosmen family, which holds a near 19 percent stake in National Express, said on Friday the company had failed to carry out a full assessment of its options, in particular the merger proposal from Stagecoach.

"The Cosmens are contacting other shareholders to assess their position and test the amount of support they have," regarding the Stagecoach approach, he said.

The source said any discussions with shareholders would not focus exclusively on Stagecoach and the family was primarily looking to ensure all possible strategic options for National Express had been explored.

National Express insisted all talks regarding a possible deal were over.

"The board of National Express has ended all discussions with Stagecoach in order to execute a fundraising before the end of the year," a National Express spokesman told Reuters.

"The company is fully committed to a fund raising and is currently working on the details."

Although critical of the company's handling of Stagecoach, the Cosmens still back plans to raise about 350 million pounds from shareholders.

"The Cosmen family still supports a rights issue if certain parameters are met," a family spokesman said on Monday.

A spokesman for National Express said the parameters related to "the size and structure of the issue" and that details would be announced later this month.

Shares in National Express, which have risen by a third in the past quarter on hopes of a takeover, were 0.2 percent lower at 324.1 pence by 1335 GMT, while Stagecoach was down 0.3 percent at 144.4 pence.

Analysts said National Express faced a tough challenge getting away an equity financing of around 300 million to 400 million pounds when its market capitalisation was only around 500 million.

For a factbox on the Cosmens, click on

(Writing by Paul Sandle; Editing by Erica Billingham and David Cowell)

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