Stagecoach Agrees Deal With Fund Managed by German Firm DWS

Stagecoach has dropped its support for a £1.9bn merger with National Express, instead agreeing to be taken over by a big German infrastructure fund in a £595m deal.

Stagecoach said it was recommending a sale to the fund managed by DWS Infrastructure for 105p a share in cash, and has withdrawn support for the National Express bid.
 

Shares in Stagecoach ended 36% up on the day despite the verdict, with shareholders set to profit from the DWS bid replacing the all-share deal apparently sealed in December, that would have brought Stagecoach’s UK local bus operations together with National Express’s intercity coach network.

That tie-up with National Express was being investigated by the Competition and Markets Authority, which served an initial enforcement order in January to stop the firms from combining operations or selling any UK businesses while it looked into the deal.

DWS, spun out from Deutsche Bank in 2018 via a flotation on the Frankfurt stock exchange, has a number of other investments in the UK, including Corelink Rail Infrastructure; Kelda, the owner of Yorkshire Water; and Peel Ports.

Stagecoach said the DWS bid offered greater certainty for investors and its 24,000 employees, with the overall headcount of bus drivers expected to remain the same, while Stagecoach’s headquarters in Perth, central Scotland, will be retained along with its staff. 

It added that the new deal, which is expected to be completed in the first half of this year, would also provide continuity at the top, with the chief executive, finance director and UK managing director staying on.