BUS and rail giants Go-Ahead yesterday saw its shares jump by around 20 per cent after revealing it had rejected a possible takeover approach from a French consortium.

The Newcastle-based transport group said it had received a proposed 650p-a-share approach from French industrialists Caisse de Depots-Developpement (CDD) and private equity company Rhone Capital, valuing it at around £327m.

Go-Ahead confirmed it had met the two groups early in July to discuss the offer.

The company revealed yesterday it had given "full consideration to that proposal and in the light of strategic developments and opportunities in particular in rail and airport services, rejected it as being unwelcome and wholly inadequate."

However, shares in Go-Ahead, which runs the Thames Trains rail franchise involved in the Paddington rail crash last year, sped on the offer - jumping 111p to 661p - as investors hoped for a higher bid emerging.

A successful bid would generate millions for some of Go-Ahead's directors who hold significant stakes in the group.

A bid at 650p-a-share would value founder and managing director Martin Ballinger's 3.6 million shares at £23.4m and commercial director Christopher Moyes' 2.86 million shares at £18.6m.

The announcement came just a day after bus and train operator National Express made a £166 million takeover bid for Prism Rail in a deal which would see the group own seven out of the 25 UK rail franchises.

News of the potential deal sparked share rises in other transport companies as the City hoped for further consolidation.

Go-Ahead has already reported half-year pre-tax profits of £22m against £21.4m at the same stage last year.

No-one from the Board would comment directly on yesterday's announcement.