* 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 (Reuters) - 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 resolutions.
“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 statement.
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 ($2.07 billion).
“Elliott is pressing for a more aggressive growth strategy and possibly a merger,” said Oriel Securities analyst Edward Stanford.
“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 passed.
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) ($1=.6149 Pound)