Scott Wright: What will twist in Stagecoach takeover saga mean for Scotland?

But that proposal now looks to have been eclipsed by a counter-offer from DWS Infrastructure, a German investment giant that is ultimately part of Deutsche Bank.

DWS has capitalised on the delay sparked by the competition watchdog’s decision to investigate the National Express proposal by testing the appetite of the Stagecoach board with an offer of 105p per share– valuing Stagecoach at nearly £600m. And it has been duly embraced by Stagecoach chiefs.

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“We believe it will open a new and exciting chapter for Stagecoach, backed by a team who share our vision for a more sustainable future,” declared Stagecoach chief executive Martin Griffiths. “We also believe it will deliver positive outcomes both now and in the long term for all of our key stakeholders.”

There are several compelling reasons why DWS now appears to be in the driving seat of this takeover battle – and it could be argued that its offer would ultimately be more beneficial than the National Express tie-up for Scotland as a whole.

The principal duty of the Stagecoach board is to act in the best interests of the company’s shareholders, and in basic arithmetic terms the DWS proposal offers better value than what was tabled by National Express.

The approach from National Express was at the time based on an 18 per cent premium to the Stagecoach closing price of 68.05p on Friday September 20, the last business day before its announcement of a possible offer.

Based on last night’s closing share price for National Express, its bid for Stagecoach would be worth about 84.7p-a-share. This is still considerably lower than the 105p per share pitch from DWS.

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But price is not the only dimension to the DWS approach that will have proved attractive to the Stagecoach board. While National Express conceded its proposal “will likely involve headcount reduction in duplicative roles” – and identified around 50 positions at risk in corporate, head office and senior management positions across the two businesses – DWS declared that the overall headcount in frontline operational roles would be unchanged.

DWS, which specialises in core infrastructure and transport investments, has also handed a vote of confidence to the “well-regarded senior management team” at Stagecoach. It pledged to retain Mr Griffiths, who has been chief executive of Stagecoach since 2013, finance director Ross Paterson, and UK managing director Carla Stockton-Jones.

In contrast, National Express does not foresee either Mr Griffiths or Mr Paterson remaining in post under the merged entity, stating that the posts of chief executive and chief financial officer would be held by the current incumbents of those roles within its organisation, Ignacio Garat and Chris Davies.

From the perspective of Scotland as a whole, there is always a degree of disappointment when it becomes clear that a Scottish company is about to be taken over by a party from outside the country.

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Stagecoach now seems destined to become the latest in a long line of Scottish businesses that have lost their independence, following the sale of Aggreko to private equity players TDR Capital and I Squared Capital for £3.2 billion last year, and the loss before that of such heavyweights as Stakis, Scottish & Newcastle, Kwik-Fit and ScottishPower. To that list can also be added Bank of Scotland, which merged with Halifax in 2001 before the combined entity, HBOS, was acquired by Lloyds TSB (which in turn became Lloyds Banking Group) at the height of the financial crisis in 2008 and 2009.

But even though a successful bid from DWS would take the ownership of Stagecoach outside Scotland, there are pluses to that outcome, including the commitment to retaining the transport company’s headquarters and related functions in Perth, as well as in Stockport and London. DWS, which has multiple investments in the UK, including Peel Ports and Kelda, owner of Yorkshire Water, has been shrewd enough to recognise the importance of continuity and maintaining Stagecoach’s long-running presence in Perth that now stretches back more than four decades. Not only is this significant in terms of safeguarding the goodwill the company has built up in the local community, it will hopefully mean key decisions on the future of Stagecoach will continue to be made in Scotland, under the guidance of its experienced leadership team.

National Express, by contrast, said it would base the enlarged business in Birmingham, should its offer for Stagecoach go through.

While some may argue that the ownership of Stagecoach would still be held overseas if DWS wins the day, the German investor has been keen to flag itself as a “patient long-term infrastructure investor with a proven track record”. Moreover, it said it is committed to unlocking value through “continued capital investment in Stagecoach’s asset base”, and highlighted the role it believes the Scottish company can play in the journey to net zero.

Hopefully, this is a signal that, should DWS ultimately emerge victorious, it will not be looking to strip out costs to achieve a quick return on its investment.

There is still some road to travel before the final destination is reached on the takeover journey. National Express said on Thursday it was “considering its options”, and conceivably it may yet come up with a further offer, though reports suggest it is now likely to withdraw from the race.

The sale of Stagecoach to a business outside Scotland may not be ideal for the Scottish economy. But should it be sold to a player that pledges to retain its HQ in Scotland, and maintain jobs here, there could certainly be worse outcomes.