UK transport group National Express Group has made an agreed take-over bid for rail operator Prism Rail.

National Express, the bus and rail company which runs five railway franchises in England and Scotland, is offering to buy Prism for �166m.

Prism currently holds four franchises in London, East Anglia and Wales.

"The combination of National Express and Prism Rail represents an excellent opportunity as we are enhancing National Express's position in the rail sector of the UK's public transport market," said National Express chief executive Phil White.

"The acquisition of two busy London commuter businesses with strong growth prospects and the longer tenure of c2c (London Fenchurch Street to Tilbury and Southend) will strengthen our operations," he said.

National Express said it would offer 282.5 pence in cash and 0.375 of its shares for every Prism Rail share plus a special dividend of 40 pence per share.

It said that 34.5% of Prism shareholders had already accepted the deal, adding that the offer represents a 23% premium to Prism's Monday closing price of 512.5 pence.

National Express' railway franchise includes Central Trains, Gatwick Express and ScotRail.

Prism recently announced that next year it will surrender its loss-making franchises in Wales - the Cardiff Railway and Wales & West.

Its franchise includes the West Anglia Great Northern.