Stagecoach sells intercity services as merger deadline looms
Stagecoach has agreed to sell Megabus and two other intercity coach services for £8.75m to head off potential competition barriers to its proposed merger with National Express.
The bus operator said it would sell Megabus, Stagecoach's 35% stake in Scottish Citylink Coaches and Falcon South West to Singapore's ComfortDelGro (CDG). CDG already owns 65% of Scottish Citylink.
The deal, comprising £7m cash and a £1.75m loan to Stagecoach Bus Holdings from Scottish Citylink, is expected to complete at the end of February.
Stagecoach has been in talks with National Express since September about an all-share offer from National Express valuing Stagecoach at about £445m. The extended deadline for an agreement is 17:00 on Tuesday 14 December.
The sale of the intercity assets "proactively addresses potential regulatory considerations" related to the deal, Stagecoach said. Stagecoach shares rose 6.9% to 80.15p at 10:19 GMT, valuing the company at almost £442m.
Martin Griffiths, Stagecoach's chief executive, said: "Stagecoach developed the Megabus brand in 2003, as we saw real potential in the long-distance intercity coach market in the UK.
"In 2005, our belief in this market saw us create a joint venture with CDG to run the Scottish Citylink business and we further expanded our intercity coach business with the development of our bespoke Falcon service in the South West of England serving Bristol Airport. Those businesses will continue to thrive under the ownership of the world renowned CDG brand".