Page last updated at 08:31 GMT, Friday, 16 October 2009 09:31 UK

Bid failure hits National Express

National Express coach

Shares in National Express have fallen 26% after its largest shareholder withdrew a £765m takeover offer.

Spain's Cosmen family, which owns an 18.5% stake, had joined with private equity firm CVC on the bid.

The CVC-Cosmen consortium said its offer would be withdrawn if not recommended by the board of National Express.

Rival Stagecoach had agreed to buy National Express's bus and rail operations if a deal went through.

When the market opened, shares in the company fell 124p to 347p. At one stage, £250m was wiped from the value of the company.

The Cosmens have announced that they will instead support plans for National Express, which has debts of nearly £1bn, to strengthen its finances by raising cash from shareholders.

The consortium takeover offer was made after National Express lost the rights to the East Coast route.

In July, the government said it would take the route back into public ownership after the company lost £20m in the first half of the year and suffered falling passenger numbers.

The UK's biggest transport firm, FirstGroup, was also considering an all-share merger with National Express, but pulled out of the running earlier in the year.

National Express has 43,000 employees worldwide. Alongside its rail arm, the group's bus business employs about 5,100 people in the West Midlands and Dundee, carrying about 320 million passengers a year.

The group's coach operation has 1,800 staff and carries more than 18 million passengers a year.

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