National Express shares jumped more than 6pc after Firstgroup confirmed it had approached the rival rail and bus operator about a possible offer.  

FirstGroup said in a statement that its proposed nil-premium, all-share merger “to maximize the potential of the two companies” had been rejected. National Express said was focused on implementing a number of initiatives to strengthen the group and did “not consider it appropriate to enter into discussions with FirstGroup”.   The company is struggling with debts of £1.2b and is attempting to renegotiate the onerous terms of its East Coast rail franchise with the Department for Transport. On Wednesday it is due to give the City its latest trading update.
FirstGroup, which made the approach on June 19, said it continued to believe that there was a “significant industrial and commercial logic in a combination of the two companies”.
A potential combination of the two firms would consolidate Aberdeen-based FirstGroup's position as the UK's biggest transport firm. It is already the UK's largest bus operator, running more than one in five of all local buses, and a quarter of the UK's passenger rail network.
It has four rail franchises - First Capital Connect, First Great Western, First ScotRail and First TransPennine Express - as well as operating Hull Trains services under an open access agreement.
National Express, which operates buses in the West Midlands and Dundee, has three rail franchiers - the East Coast and East Anglia franchises as well as the c2c London commuter service.
FirstGroup said a further announcement would be made in due course if appropriate. Its shares fell 1.2 percent in early trading.   (Source: Telegraph.co.uk)