NatEx Stagecoach deal off as DWS bid accepted

Stagecoach has received a rival £595mn cash bid from German asset manager DWS, scuppering a takeover offer by National Express for the Scottish bus operator that would have created a UK road transport giant, the Financial Times has reported.

A fund managed by DWS Infrastructure said on Wednesday that it agreed to pay 105p in cash for each Stagecoach share at a premium of 37 per cent to its stock price a day earlier. The news sent Stagecoach’s shares soaring on Wednesday by the same amount.

An all-share offer in December by National Express valued Stagecoach at about £470m at the time of the bid. The fresh offer topped the Perth-based bus company’s average share price since the previous offer by almost 20 per cent.

Stagecoach said that its directors have decided unanimously to withdraw from recommending the National Express takeover offer and opt for the DWS Infrastructure bid instead.

The deal requires the support of shareholders with 75% of the company’s stock. Dame Ann Gloag, a founder of the company who still holds 10.5 per cent of shares, gave an irrevocable undertaking to accept. However, directors including her brother and co-founder Brian Souter that hold 14.6 per cent of shares are unable to change their own irrevocable undertakings to accept the National Express offer.

The offer comes as UK bus operators received breathing room last week after the government extended pandemic recovery funds beyond April for six months, helping to keep services going as passenger numbers pick up again.

Investors are optimistic that the national bus strategy, which aims to improve services in England outside of London, and the UK’s goal to reach net zero by 2050, will drive growth for public transport operators.

DWS said that its long-term investment horizon makes it well placed to support Stagecoach’s business and that it has experience in transport through its ownership of Belgian bus operator Hansea.