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£765m bid for National Express withdrawn

PUBLISHED: 10:46 16 October 2009 | UPDATED: 08:42 01 August 2010

Paul Hill, business editor

The battle over the future of National Express took another twist this morning as the front-runner to buy the rail operator withdrew its £765m takeover proposal.

The battle over the future of National Express took another twist this morning as the front-runner to buy the rail operator withdrew its £765m takeover proposal.

The Cosmen family, who already own an 18.5pc stake in National Express, said they would not pursue a full takeover - but would support the rail operator's plans to tap shareholders for cash to strengthen its finances and ease its multi-million pound debt.Shares in National Express slumped as the markets opened to the news this morning - wiping millions off the value of the company.

But National Express - which operates the Norwich to London mainline and services across the East of England - described its performance as "resilient".

"The board believes that National Express has a strong future as an independent listed company, offering a compelling investment case building on the strength of its individual businesses," the firm said.

Ironically, the board had rejected an earlier £680m proposal from the Cosmens on the grounds it "undervalued the group and its prospects".

A takeover by the Cosmens was expected to herald the break-up of the group - with Stagecoach expected to take on National Express's rail franchises, including the East of England services and the firm's C2c business.

A change of ownership would have also ended a troubled spell for National Express, which has seen strikes and a bitter row with the government after failing to renegotiate the loss making London to Scotland East Coast Mainline franchise with ministers.

The Cosmens took their stake in 2005 when National Express entered the Spanish coach and bus market with the acquisition of Alsa, which was owned by the family.

Jorge Cosmen is deputy chairman of the UK firm which employs 43,000 people through operations in the UK, North America and Spain.

National Express posted interim pre tax losses of £48.1m against profits of £52.4m a year earlier.

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