The UK based bus and rail group said the acquisition complemented its existing operations in the country as Continental had little overlap with Alsa, the Spanish bus service it bought in 2005.

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UK's National Express buys Continental Auto

EiTB: 04/27/2007

The deal with Grupo ACS gives National Express a total of more than 2,100 vehicles in Spain and the capacity to carry more than 142 million passengers per year.

Britain's National Express said on Friday it was bolstering its presence in the fast-growing Spanish bus market with the 450 million-pound ($899 million) acquisition of Continental Auto, operator of a fleet of 860 vehicles.

The deal with Grupo ACS gives National Express a total of more than 2,100 vehicles in Spain and the capacity to carry more than 142 million passengers per year.

The group also said it had made a strong start to the year and trading was in line with its expectations and National Express shares were up 1.5 percent at 12.6 pounds by 0711 GMT, valuing the group at around 1.9 billion pounds.

Finance Director Adam Walker said the Continental deal gives it the top two bus operators in Spain, following the acquisition of Alsa in 2005, with total market share of around 14 percent.

Chief Executive Richard Bowker said Spain was set to liberalise passenger transport in its 130 cities with populations of over 50,000, which already generate around 1.7 billion passenger journeys a year.

"As liberalisation proceeds, not just in buses and coaches, but also for rail if it happens, that puts us in a prime position," he told reporters. The group said the deal would be funded from new and existing bank facilities.

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National Express in €700m bid for Spanish bus group

Daily Telegraph: 27/04/2007
By Ben Harrington

Bus and rail company National Express is in advanced negotiations to acquire Spanish bus group Continental Auto for in excess of €700m (£480m).

It is understood National Express is in the final round of the auction of Continental Auto after its offer beat that of a number of rival bidders.

Sources involved said National Express is already in exclusivity to buy Continental Auto, however, people close to the situation denied this was yet the case.

Other parties to have made offers for the business include private equity firm Doughty Hanson, which owns the Avanza Group, one of Spain's largest independent bus operators. Doughty is understood to have teamed up with Spanish private equity firm Mercapital.

Rival UK transport group Arriva and 3i are also believed to have made offers for Continental Auto, but it is not clear whether they have made it to the final round.

First Group, the largest of the UK-quoted bus and rail groups, also took a look at Continental Auto's books, but is not believed to have made an offer because it is in the process of buying Laidlaw, the American transport firm.

If National Express clinches Continental Auto, people familiar with the matter said the company is likely to fund the deal by taking on extra debt instead of issuing or placing new equity.

At the end of 2005 National Express bought Alsa, a Spanish bus company, and is keen to build on its market position in the country. Alsa's founding Cosmen family became the UK company's largest shareholders.

Continental Auto holds the concessions to run 60 routes in Spain. Although it has a relatively modest turnover - €200m in 2005 - it is a high-margin business, making profits of €46m in the same year. It also has subsidiaries in freight, hotels, catering and rail operations Continental Rail and Construrail.

National Express and Continental Auto declined to comment.