* Elliott expects Cosmen family to back its resolutions
* Elliott, Cosmen need 15.2 pct more support to succeed
* Nat Express urges shareholders to vote against Elliott
* Nat Express shares up 4.2 percent
(Adds Nat Express, analyst comment, updates shares, details)
By Rhys Jones
LONDON, April 12 The activist investor calling
for a boardroom shakeup at National Express (NEX.L) said on
Tuesday it had won the backing of Spain's Cosmen family, the
British transport group's second largest shareholder.
U.S. hedge fund Elliott Advisors, National Express's largest
shareholder with a 17.5 percent stake, sent a letter to the
transport group's investors last week asking them to elect three
new independent directors to push for changes at the firm at its
May 10 annual general meeting (AGM). [ID:nLDE72S203]
"Elliott expects that the Cosmen family and its nominees
will vote their shares in favour of the resolutions Elliott has
requested to be tabled at the National Express AGM to elect
those candidates," Elliott said in a statement.
Analysts believe the support of the Cosmen family -- which
owns 17.4 percent of the company -- is key to the success of
Elliott's move, which is viewed as an attempt to break up or
sell the British bus and rail operator.
National Express, which is half way through a turnaround
plan following a difficult couple of years, said it was holding
discussions with all of its shareholders about Elliott's
"National Express continues to urge them strongly to vote
against since the board views them as an attempt to circumvent
best corporate governance practice," the company said in a
Shares in National Express, which have fallen 7.5 percent in
the last three weeks, were up 4.2 percent at 249.25 pence by
1105 GMT, valuing the company at around 1.27 billion pounds
"Elliott is pressing for a more aggressive growth strategy
and possibly a merger," said Oriel Securities analyst Edward
"Other shareholders will need to consider whether there is a
realistic prospect of an offer for National Express by another,
probably European, operator. The possibility of corporate
activity is likely to be helpful to the share price in the short
term in our view."
The Cosmens attacked the National Express board in 2009
after the transport group rejected a proposed 1.6-billion-pound
all-share merger with rival Stagecoach (SGC.L) -- a move which
the Cosmens had pushed for.
Analysts have questioned whether the non-executive directors
proposed by Elliott are truly independent and if calls for a
more aggressive expansion strategy are likely to distract
management from the turnaround plans.
Elliott and the Cosmens hold a combined 34.9 percent of
National Express shares and would need support from shareholders
representing a further 15.2 percent for the resolutions to be
National Express, which also operates buses and coaches in
Spain and North America, said it had started looking for new
non-executive directors before Elliott proposed its own
directors last month.
(Editing by Neil Maidment and Mark Potter)