Transport group National Express has turned down a takeover bid from rail and bus operator FirstGroup.
A successful partnership between the two rivals would create a public transport giant and would run large parts of the UK bus and rail network and a large piece of the yellow school bus services in the US.
Furthermore, the two companies would have a combined turnover of around £9 billion and a stock market value exceeding the £2 billion mark.
FirstGroup said there was “significant industrial and commercial logic” in a partnership of the two transport firms but National Express said it was focusing on its own initiatives and described the approach as “highly preliminary”.
Meanwhile, National Express, which is due to release a trading update later this week, is obligated to pay the Government £1.4 billion to run the East Coast Mainline until 2015. The route runs between Edinburgh and London.
However, the franchise has been suffering with sales growing by just 0.3% in the first quarter of the year, compared with 9% over the whole of 2008.
According to a report in The Times, the future of the East Coast rail franchise is unclear after discussions between National Express and the Government broke down over the weekend.
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