* Says at invitation of National Express board
* Follows collapse of Cosmen-led bid for National Express
* National Express will still explore fund-raising options
* National Express says no fresh approach from FirstGroup (Adds National Express, Stagecoach statements)
LONDON, Oct 18 (Reuters) - British bus and rail group
Stagecoach
The confirmation followed a report about the planned all-share merger in The Sunday Telegraph newspaper, which valued the potential deal at 1.65 billion pounds ($2.7 billion).
In a statement, Stagecoach said that "at the invitation of the National Express board," on Oct. 16, it sent a letter indicating the terms under which it would be prepared to enter into talks about a merger of the two companies.
The approach follows the Friday collapse of takeover talks between National Express and a consortium led by Spain's Cosmen family. [ID:nLG137796]
Stagecoach had made a deal with the consortium to buy National Express's UK bus and rail operations if the offer succeeded.
In a separate statement on Sunday, National Express said it had received a "highly preliminary" proposal from Stagecoach that would leave National Express shareholders owning no more than 40 percent of the combined group's stock.
National Express added it would consider the Stagecoach approach but continue to explore an equity fund-raising, "in order to see whether the Stagecoach proposal offers greater value and certainty to National Express shareholders."
In addition, National Express said it had not received a
fresh proposal from British transport group FirstGroup
National Express is due to issue an interim management statement on Thursday. ($1=.6157 Pound) (Reporting by James Davey and Simon Jessop; editing by Will Waterman and Gunna Dickson)