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National Express management under attack

The Cosmen family, the largest single shareholder in National Express with 19% of the share capital, has today called upon National Express management to reappraise a potential tie-up with Stagecoach. As we covered earlier this week, the National Express board of directors walked away from a potential merger with Stagecoach just a few days ago, citing potential competition issues and delays in securing the deal.

The company is now looking towards a rights issue by the end of the year in order to avoid a potential £5 million interest penalty payment on the company's £1 billion plus debt. However, the public comment from the Cosmen family may well make the management think again in what is no doubt a very difficult situation for the company. The situation was recently made worse when a private equity bidder walked away after obtaining permission to look at the company's books.

Whatever happens to National Express it will need to happen in the short term because the growing debt, difficult trading conditions and doubts surrounding the short to medium term future of the group is doing the share price no good. The Cosmen family are not the only investors who are concerned about the short to medium term outlook for the group and many analysts believe the company should again look at a potential merger with Stagecoach.

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