The decision in April by the founders of bus and coach group Stagecoach (SGC) to start selling down their 27.1% stake has led to a takeover approach by transport rival National Express (NEX).

Brian Souter and his sister Ann Gloag said five months ago that they would reduce the family ownership to 5% over the coming decade.

In doing so, they removed a major hurdle for any would-be suitor by declaring their intention to sell down the bulk of their holding.

National Express has acted quickly and made an all-share takeover approach for Stagecoach, saying it is prepared to pay 0.36 new shares for every Stagecoach share.

This deal, which is still subject to a formal bid, would see Stagecoach shareholders own a quarter of the combined group.

National Express wants to buy the business to increase its position in growth areas such as private coach hire and corporate transport. Running the businesses as one would also generate operational synergies and economies of scale benefits.

Jefferies analyst Becky Lane says that while National Express’ all-share offer looks financially attractive with double-digit earnings accretion and enables the buyer to de-lever quicker, she believes investors will have questions around competition approval, future regional bus growth and the coach opportunity rationale.

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