Page last updated at 10:02 GMT, Monday, 29 June 2009 11:02 UK

National Express turns down bid

National Express train
National Express is due to release a trading update on Wednesday

Rail and bus operator FirstGroup has said it has had a takeover bid for rival National Express rejected.

But FirstGroup said it continued to believe there was "significant industrial and commercial logic" in a combination of the two companies.

National Express said it was focusing on its own initiatives.

Weekend reports said that talks between National Express and the government over the future of the East Coast rail franchise had stalled.

In a statement, National Express said: "At the present time, the board is focused on implementing a number of initiatives to strengthen the Group and does not consider it appropriate to enter into discussions with FirstGroup."

Slow growth

National Express is contracted to pay the government £1.4bn to run the East Coast Mainline, which runs between Edinburgh and London, until 2015.

But sales at the franchise grew by just 0.3% in the first three months of 2009, compared with 9% over the whole of last year.

Cuts have been made in dividend payouts and capital spending while 750 jobs have been lost.

Last month, it started charging passengers for reserving a seat on its East Coast and East Anglia franchises.

The firm is currently trying to reduce a debt pile of about £1.2bn.

National Express is due to release a trading update on Wednesday.



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