Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Aberdeen transport giant knocks back £1.2bn-plus takeover approach

Post Thumbnail

FirstGroup has rebuffed a takeover approach potentially worth more than £1.2 billion.

The Aberdeen-based transport giant said the proposed initial cash payment of £1.18 per share from private equity company I Squared Capital Investors “significantly” undervalued its continuing operations and future prospects.

And the prospect of a further “contingent right” to 45.6p per share “does not provide shareholders with sufficient certainty”, FirstGroup added.

The latter payment is dependent on the outcome of an “earnout” linked to the sale of FirstGroup’s FirstTransit subsidiary in North America, as well as net proceeds realised from “legacy assets and liabilities” of the FTSE 250 firm’s former Greyhound business.

There was a near-9% rise in the value of FirstGoup’s shares on May 26, after the news of I Squared’s interest broke.

At today’s market close, the stock was down by 1.24% at £1.35.

A family getting on a train at South Western Railway
FirstGroup’s South Western Railway operation.

A statement from FirstGroup to the London Stock Exchange said: “The board, having carefully evaluated the proposal together with its advisers, concluded that the cash component of 118p per FirstGroup share significantly undervalues FirstGroup’s continuing operations and its future prospects.

“The contingent right to up to 45.6p per FirstGroup share does not provide shareholders with sufficient certainty.

“Accordingly, the board has unanimously rejected the proposal.”

A First bus with the destination of Dyce via City Centre

The company expects to announce its results for the year ended March 26 2022 next Tuesday.

I Squared, operating from offices in London, Hong Kong, Singapore, New Delhi and Miami has made previous approaches, all of which have been rebuffed.

Under City takeover rules, the private equity house has until 5pm on June 23 to “put up or shut up” – to either announce a firm intention to make an offer for FirstGroup or walk away.

A FirstGroup yellow school bus
First Group sold its First Student “yellow school bus” business in North America.

FirstGroup announced last July it had completed the sale of North American businesses First Student and First Transit.

The two businesses were acquired by Swedish private equity company EQT Infrastructure in a deal worth £3.3bn.

In October, FirstGroup said it had sold Greyhound – the iconic coach business connecting cities across North America – drawing its ownership to a close after 14 years.

A Greyhound coach in a sunny landscape
The company also offloaded its iconic Greyhound business.

The £125 million sale to Germany’s FlixMobility more than two years after the division was put up for sale ended FirstGroup’s interests across the Atlantic, leaving it to focus on its UK bus and train operations.

I Squared’s latest attempt to bolster its global infrastructure investments, comes just a few months after FirstGroup unveiled Graham Sutherland as its new chief executive.

Mr Sutherland, who previously held a number of leadership roles in the telecommunications sector, started his new job last month.

FirstGroup chief executive Graham Sutherland
New FirstGroup chief executive Graham Sutherland.

Former CEO Matthew Gregory announced his departure last June after he and the rest of the board faced criticism from the country’s largest shareholder, US hedge fund Coast Capital.

Coast and other investors were unhappy over the sale of First Student and First Transit, claiming the deal left them short-changed.

North-east entrepreneur Sir Moir Lockhead led an employee-management buyout of Grampian Transport in 1989 to form FirstGroup.

Sir Moir Lockhead standing with a FirstGroup bus outside the Marischal College
Sir Moir Lockhead.

The company is now the second largest regional bus operator in the UK, carrying hundreds of thousands of passengers a day.

Its First Bus division serves two-thirds of the UK’s 15 largest conurbations, including major urban areas such as Aberdeen, Glasgow, Bristol and Leeds, with one-fifth of the market outside London.

First Rail is the UK’s largest rail operator, with many years of experience running all types of passenger services. The division has four UK Government-contracted operations – Avanti, GWR, SWR, TPE – and also runs two open-access operations, Hull Trains and Lumo.