STAGECOACH has opened talks with National Express over a potential merger.
The bus giants confirmed that discussions over a possible all-share combination were taking place.
In a statement to the stock market, the boards of both companies express their belief that a potential combination “would be a strategically compelling proposition with significant growth and cost synergies”, adding that it would deliver “strong value creation for both sets of shareholders.”
Under the terms of the potential deal, 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.
Shares in Stagecoach surged by more than 20 per cent in early trading, with National Express up by nearly 8%.
The talks come following a bruising spell for transport companies during the pandemic. Hundreds of millions of pounds of public money has been invested to ensure services were maintained for key workers during periods of lockdown.