21 September 2021
Stagecoach Group plc
Statement regarding recent press speculation
The Board of Stagecoach Group plc ("Stagecoach" or the "Company") notes the recent press speculation and confirms that it is in discussions with National Express Group PLC ("National Express") in relation to a possible all-share combination (the "Potential Combination" to form the "Combined Group").
Under the terms of the Potential Combination, it is expected that Stagecoach shareholders would receive 0.36 new National Express ordinary shares for each Stagecoach ordinary share, resulting in them owning approximately 25 per cent. of the Combined Group.
The Boards of Stagecoach and National Express believe that the Potential Combination would be a strategically compelling proposition with the potential to realise significant growth and cost synergies, as well as delivering strong value creation for both sets of shareholders.
Compelling Strategic and Financial Rationale
It is expected that the Potential Combination would provide an opportunity for the Combined Group to:
- Deliver significant operational efficiencies across the combined networks, with, for example, National Express Coach utilising Stagecoach's well-located depot network to run and maintain its coach operations;
- Bring the 'best of both' from the combined operational capabilities of both businesses, whilst also delivering significant benefits to customers and passengers;
- Accelerate the expansion of National Express' growth businesses, such as private hire coach, corporate shuttle and accessible transport, across Stagecoach's UK footprint, as well as deliver other growth and revenue synergies; and
- Maintain strong relationships with key public sector stakeholders, best positioning the Combined Group in an evolving industry landscape, with quality public transport playing a critical role in delivering government priorities for cleaner, greener and more resilient economies.
Key Terms
Under the terms of the Potential Combination, it is expected that Stagecoach shareholders would receive 0.36 new National Express ordinary shares for each Stagecoach ordinary share, resulting in them owning approximately 25 per cent. of the Combined Group.
As at close of business on 20 September 2021 (being the last business day before the date of this announcement), the terms of the Potential Combination implied a premium relative to the price of Stagecoach's ordinary shares of approximately:
· 18.0 per cent. based on respective closing share prices;
· 23.2 per cent. based on respective last three month volume weighted average share prices; and
· 17.6 per cent. based on respective last six month volume weighted average share prices.
Governance and Management
It is envisaged that the Board of Directors of the Combined Group would comprise an approximately proportionate share of Stagecoach and National Express directors.
Upon completion of the Potential Combination, it is envisaged that:
· Ray O'Toole would become Chair of the Board of the Combined Group, leveraging his prior experience across both businesses, with Sir John Armitt CBE stepping down having been Chair of National Express since February 2013;
· Jorge Cosmen would be Deputy Chair of the Combined Group; and
· Ignacio Garat and Chris Davies would be CEO and CFO respectively of the Combined Group.
