It was all smiles and a handshake at London’s Liverpool Street station on March 18 when transport secretary Philip Hammond officially launched National Express East Anglia’s new fleet for the Stansted Express service. But less than a week later Hammond’s department had given National Express it’s marching orders by omitting the group from the shortlist of bidders for the new Greater Anglia franchise.

The group’s failure to make the Department for Transport’s Anglia shortlist will restrict it to just one franchise – the London-Essex c2c operation – leading some to question whether it will remain in the market. Meanwhile, the group this week faced calls for a shake-up of its board. Elliott Advisors, which now owns
17% of the group, believes that new blood will help the company to exploit opportunities.

Activist investor Elliott is putting three new independent directors up for election at May’s AGM. It says the trio will “provide a fresh perspective and strategic outlook, designed to capture exciting growth opportunities”.

It is not clear whether Elliott has the support of the Cosmen family, which holds nearly 20% of National Express shares. However, Madrid-based newspaper Expansión reports that Elliott may seek the break-up of National Express Group, allowing the Cosmens to buy back Alsa, the Spanish coach business they sold to the group in 2005.

Elliott said: “We see exciting opportunities for National Express in the transport sector and believe existing management has done a commendable job in turning the company around. National Express faces fierce competitive pressures from European state players who have both strong balance sheets and low costs of capital. In particular in the highly competitive UK transport market, we expect the company to be increasingly at a significant disadvantage.”
The three directors put forward by Elliott are Spanish banker Javier Alarco Canosa, entrepreneur Marc Meyohas and Chris Muntwyler, the former CEO of DHL Express in the UK.

National Express said this week that it had begun a search for directors some weeks ago.

A statement issued by the group said: “The board believes that all candidates should participate in a proper selection and evaluation process. This will ensure that correct corporate governance is followed and that directors can be appointed to promote the interests of all shareholders.”

Commenting on the group’s failure to make the Greater Anglia shortlist, a National Express Group spokesperson said: “We are currently seeking clarification on this disappointing decision. We believe we put forward a very positive and high quality submission.”