Transport boss expected to resign

The deputy chairman of transport group National Express is expected to resign this week

The deputy chairman of transport group National Express is expected to resign this week after failing to get merger talks with rival Stagecoach reopened, it has been reported.

Jorge Cosmen, part of Spain's Cosmen family which holds an 18.5% stake in National Express, had been trying to rally investors into forcing the company to reopen the talks after it walked away from them to pursue a £350 million rights issue.

But he is understood to have failed to secure the 51% backing he needed to force the board to agree to the merger, according to the Mail on Sunday.

The newspaper said as a result he may announce his resignation as early as this week.

But if he resigns it is thought his seat on the board could be replaced by another member of the Cosmen family, as it is understood they are entitled to board representation as part of the deal agreed when National Express took over their family business in 2005.

Stagecoach had approached its rival about a possible merger, which would have seen National Express take up to 40% of the enlarged group, which would have been worth around £1.7 billion.

But the end of the merger talks led to a public slanging match between the Cosmens and National Express, with the Cosmens voicing "serious concerns over the absence of a well-defined strategy" at the group, while they also accused the board of dismissing the merger too quickly.

The Cosmens, who abandoned their own £765 million takeover of the company with private equity firm CVC earlier last month, called on National Express to seek independent advice on its options.

But National Express, which is burdened with almost £1 billion in debts, defended its decision to walk away and instead pursue a rights issue, due to doubts over whether the merger could be completed before the end of the year.

If the merger was not completed in time it would mean a breach of banking covenants, higher costs and what the group described as "significant uncertainty" for shareholders.