National Express investors urged to consider “alternative strategic options”
Activist investors warn of steep challenges for UK business
By CFOWorld.co.uk | CFO UK | Published 09:49, 15 April 11
National Express investors were warned of the difficulties facing its British operations and urged to consider “alternative strategic options” by its largest shareholder on Friday.
Hedge fund Elliott Advisors accounts for a 17.5 percent stake in the transit business and is pushing for three new non-executive directors to be appointed to the board at an annual general meeting (AGM) next month.
Elliott will tell investors it wants National Express to focus more on US growth opportunities and consider a synergistic merger or sell some of its key assets, which it believes will raise more than the company's current value.
“The business is currently facing steep challenges to its UK businesses, in part due to the emerging liberalisation and consolidation in the European mass transit market,” Elliott said in a statement on Friday.
“As a result, the markets that National Express operates in are set to become even more competitive, and therefore it is critical that the board considers alternative strategic options to overcome this challenge now.”
National Express was not immediately available for comment.
Elliott on Tuesday said its plans had won the backing of Spain's Cosmen family, the British transport group's second largest shareholder.
Analysts believe the support of the Cosmen family -- which owns 17.4 percent of the company -- is key to the success of Elliott's move, which is viewed as an attempt to break up or sell the British bus and rail operator.
The bus and rail operator, which is half way through a turnaround plan following a difficult couple of years, said it was holding discussions with all of its shareholders about Elliott's resolutions.
National Express, which also operates buses and coaches in Spain and North America, said it had started looking for new non-executive directors before Elliott proposed its own directors last month.
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