DWS acquires 17% of Stagecoach shares and lowers acceptance threshold

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The Stagecoach board of directors has recommended acceptance of the offer by DWS Infrastructure which they believe provides a more attractive proposition than the previous National Express bid

Directors at Stagecoach have recommended to shareholders to accept the bid by DWS Infrastructure, and withdrawn support for the earlier offer by National Express. DWS, through its Inframobility UK Bidco, has lowered the threshold required to satisfy the Acceptance Condition, giving shareholders until 1300 on 21 May to accept the offer, which values Stagecoach at approximately £594.9m.

Inframobility UK Bidco, an indirectly wholly-owned subsidiary of DWS Infrastructure, has already acquired the 93,720,491 Stagecoach shares held by Threadneedle Asset Management Limited, representing approximately 16.99% of the issued ordinary share capital of Stagecoach, for a price of 105p per share. Taken together with an irrevocable undertaking from Dame Ann Gloag to accept the DWS offer, this represents a total of 151,382,458 Stagecoach shares, representing approximately 27.45%, in the offer’s favour.
A spokesperson for DWS said: “Our offer provides a significant cash premium and certainty to Stagecoach investors as well as benefits to other stakeholders including greater certainty for employees and access to capital to invest in services and deliver on Stagecoach’s existing strategy to transition to a net-zero future.”

Hamish Mackenzie, Head of Infrastructure at DWS, added: “By lowering the acceptance threshold, DWS Infrastructure is demonstrating its commitment to the acquisition of Stagecoach, and providing further assurance to Stagecoach’s stakeholders. As we look ahead, DWS Infrastructure will provide the substantial capital investment and long-term perspective needed to unlock value and capture the significant growth opportunities presented by increased public and private investment in the UK bus and coach sector.”

According to Stagecoach Chairman Ray O’Toole, the offer presents a number of benefits to Stagecoach key stakeholders as well as supporting significant growth opportunities for the Perth-based firm. It will provide continuity in terms of the well-regarded senior management team, he said, with the retention of the current Chief Executive, Finance Director and UK Managing Director. For employees, it will provide greater certainty over the future, with overall headcount in frontline operational roles expected to remain the same, as well as the retention of Stagecoach’s existing HQ functions and related roles in Perth, London and Stockport.

The Stagecoach Directors decided unanimously to withdraw their intention to recommend the National Express offer in favour of that by DWS, which they now believe offers a more attractive proposition for Stagecoach shareholders than the National Express offer. DWS says it sees significant opportunities for Stagecoach in the United Kingdom and intends to accelerate Stagecoach’s investments in electric buses and associated charging infrastructure. DWS also intends to pursue the two bus contracts in Dubai for which Stagecoach Group is a shortlisted bidder and to consider additional opportunities to diversify and grow the business overseas.