Birmingham-based National Express has squared up to its second biggest shareholder in a row over demands for a boardroom shake-up at the transport giant.
American hedge fund Elliott, which has been lobbying National Express to consider a sale or break-up of the business, is proposing three non-executive directors for election at the company’s annual shareholder meeting next month.
National Express called on its shareholders to reject the resolutions from Elliott and said it was already working on plans to appoint additional non-executive directors to represent the interests of all shareholders.
Elliott, which holds or has an interest in 17 per cent of the coach and bus operator, needs 50 per cent of votes from shareholders to be in favour of the resolutions at the meeting in London on May 10.
It is not known whether it has the support of Spain’s Cosmen family, the group’s largest shareholder.
In a letter to National Express shareholders, Elliott said its candidates for the board would provide “fresh impetus and thinking” and believes the company should be more pro-active in its assessment of potential deals.
In the wake of Deutsche Bahn’s recent acquisition of Arriva, it is thought potential merger partners could include Stagecoach or FirstGroup in the UK and France’s SNCF.
Elliott, which bought most of its stake in a fundraising by National following the loss of its East Coast rail franchise in 2009, said it was impressed by the recent turnaround of the business by chief executive Dean Finch.
However, it still plans to vote against the re-election of current director Roger Devlin in a shake-up that would also see the appointment of banker Javier Canosa, entrepreneur Marc Meyohas and former Swissair logistics boss Chris Muntwyler.
Elliott said the trio were selected using headhunters and had no direct connection to it.
National Express chairman John Devaney said the FTSE 250 Index company felt strongly that all candidates should participate in a recruitment process managed by the nomination committee of the board.
He added in a letter to shareholders: “This will ensure that the best candidates are appointed and that those appointed will represent the interests of all of the company’s shareholders.”
He said recent accounts showed the company was now on a sound financial footing.
Mr Devaney added: “The board and management have worked closely together to agree and execute a clear strategy that will deliver significant long-term growth for all shareholders.”
