National Express under pressure from rebel

American hedge fund Elliott, which owns 17.5 per cent of National, is meeting with investors to garner support for options that would see the bus and coach operator tie-up with another UK rival such as Stagecoach, refocus on the United States or sell off part of the business.

Elliott claimed earlier this week it had the backing of National’s second biggest investor – Spain’s Cosmen family – to vote in favour of resolutions calling for a boardroom shake-up at next month’s annual general meeting.

Together they hold nearly 35 per cent of National’s shares and Elliott hopes to win over more investors for its plans to “avoid any further destruction of value” in National ahead of a wave of industry consolidation.

Elliott said: “The business is currently facing steep challenges to its UK businesses, in part due to the emerging liberalisation and consolidation in the European mass transit market.

“As a result, the markets that National Express operates in are set to become even more competitive, and therefore it is critical that the board considers alternative strategic options to overcome this challenge now.”

It sent a letter last week to National’s investors asking them to elect three new independent directors for election at the AGM on May 10.

But National Express has put up a staunch defence, calling on its shareholders to reject the Elliott resolutions and said it was already working on plans to appoint additional non-executive directors to represent the interests of all shareholders.

National Express said it “fundamentally disagrees” with the strategic options put forward by Elliott.

It said the proposals were “focused on the short term” and would not deliver the same value for shareholders as its existing long-term growth strategy.

It added: “The group is making good progress in its process to appoint additional independent non-executive directors and believes Elliott’s attempts to appoint its own directors contravene good corporate governance.”

The Cosmens have yet to make a public statement about their support for Elliott.

National Express serves most towns and cities in Yorkshire.