UK bus and rail operator Stagecoach has agreed to pay a £100m ‘change of control’ payment to take over the rail unit of National Express.
According to the Telegraph, the payment to the Department for Transport will allow Stagecoach to keep its National Express East Anglia and C2C rail franchises, which were under threat after the rail company’s failure to honour the £1.4bn East Coast contract.
Stagecoach announced that it had agreed in principle to buy National Express’ British bus and rail operations from Spain’s Cosmen family and CVC Capital Partners, pending the success of the National Express takeover.
The payment is much higher than expected as the two franchises together only draw an operating profit of around £30m a year, and only have a short period to run on their current contracts.
The National Express board is expected to make a decision on the bid later this week.