National Express is poised to press ahead with a cash call to raise up to £350m to maintain its independence after receiving support from one of its largest shareholders.  

M&G, the fund management arm of Prudential, was at the weekend reported to have given its backing to the new chairman, John Devaney. Many of the big investors, including M&G which holds 12 percent of the shares, are said to favor the company shoring up its balance sheet via a rights issue instead of sale to Spain's Cosmen family and CVC Capital.
Investment banks Merrill Lynch and Morgan Stanley are advising National Express on the possible fund-raising.  
The cash call move would come as a setback for the Cosmen family, the largest National Express shareholder, and the private equity firm CVC, which have been trying to carry out a joint bid for the bus and rail business.
However, in a note to clients, stockbroker North Square Capital claimed that Jorge Cosmen told Spanish newspaper Expansion that he is “confident” of success in the family's attempt to buy National Express. CVC and the Cosmens are said to be hoping to secure agreement from the government to let them continue to operate two of National Express's rail franchises, C2C and East Anglia.
Speculation had been mounting that the row between the government and National Express over the East Coast main line, which the company will withdraw from this year, could mean the company would also eventually have to give up its two other rail businesses. However, there is now a suggestion that the Cosmens and CVC might try to persuade the government that a change of ownership at National Express should mean the company should be allowed to keep those businesses.
Meanwhile, rival Stagecoach has said it is in exclusive discussions with the Cosmens and CVC over a possible break-up of National Express.
The transport group, which is run by Brian Souter, also hinted that it might be keen to make a bid of its own for the whole of National Express, disclosing that it would “continue to consider all other options”.
(Source: Telegraph.co.uk)