Shareholders in National Ex­press have been canvassed as to whether they want a £350m rights issue or prefer to pursue a takeover proposal from a consortium that includes the troubled bus and train operator’s largest shareholder.

The NatExpress board met 15 of its institutional investors this week to gauge their support for an equity raising to help pay down its £977m debt .

Investors are expected to tell the board’s advisers which option they prefer in the next few days, according to people close to the situation.

Andy Brough, fund manager at Schroders, one of the top 10 NatExpress shareholders, said he would rather back the incumbent management team and participate in the upside than accept a private equity bid that was uncertain.

“Shareholders have seen how successful the reconstruction of value through equity raisings has been. We would rather go with that certainty than with a venture capitalist bid which will be subject to the normal due diligence conditions they always impose,” Mr Brough said.

Last month Spain’s Cosmen family – the largest shareholder, with an 18.5 per cent stake in NatExpress – made an all-cash takeover proposal with CVC, the private equity group.

However, since then the board has grown increasingly frustrated by what it describes as a “complex” and “conditional” bid. As a result, it requested a “put up or shut up” notice from the Takeover Panel to end the uncertainty over a possible deal.

The Cosmen family-led consortium now has until September 11 to make a firm offer for NatExpress, or walk away. Investor support for a rights issue will increase pressure on the bidding consortium to raise its offer.

Shares in NatExpress closed up 1.24 per cent at 400p on Wednesday, valuing the company at more than £612m.

John Devaney, chairman, has consistently said NatExpress did not need to do a deal to reduce its debt. The company, which scrapped its interim dividend and reduced net debt by more than £200m in the first half to £977.5m, said cost-cutting was on target to deliver planned savings of £40m a year.

Mr Devaney believes there are further savings to be made, for instance by cutting head office staff, improving fuel deals and realising some of the value in its property portfolio.

The Cosmen-led consortium has made its plans for a deal contingent on due diligence and retention of NatExpress’s two profitable rail routes: the East Anglia franchise and the c2c London commuter franchise.

But Lord Adonis, transport secretary, has threatened to revoke them as punishment for its planned withdrawal from the lossmaking East Coast line.

Stagecoach is in exclusive talks with the consortium about taking parts of NatExpress if a bid is successful.

Under takeover rules, potential bidders cannot make an offer for six months unless they make an approach by the September 11 deadline. But if the Cosmen-led consortium comes up with an offer, FirstGroup could re-enter the fray along with other bidders.

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