A Stagecoach takeover would probably attract the interest of the OFT, but they may clear the deal without referencer to the CC. It's all down to what the OFT considers as being in the interests of passengers. Now, if Stagecoach are investing in a modern fleet, and First haven't, I can't be certain, and also, if the current operations are loss making, then the OFT may clear the deal.
The OFT, and for that matter the competition commission, would have to be sure that another firm coming in would
1 - be capable of competing with Stagecoach
2 - be able to run the operations at a profit.
If the OFT is of the opinion that neither is possible, then a stagecoach takeover may be cleared.
Another thing to consider, what if First announced it was closing operations down, and Stagecoach offered to replace routes, and take on the drivers, like a firesale? It has happened here in Fife twice, in 2009, though in both cases the owners of the small firms retired. That would not attract OFT intervention, if a firm closed down, and their rival stepped in.