Company
LON:FGP
FirstGroup plc is engaged in the provision of passenger transport services. It operates in four divisions: Bus, UK Rail, North America and Greyhound.
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Chancellor of the Exchequer Rishi Sunak is expected to unveil a raft of measures to help power the British economy out of the sharp slump caused by the pandemic and lockdown measures
The firm welcomed the £254mln announced by the government to support England’s bus network increasing its services and safety measures
Greyhound is also expected to be a material recipient of US$326mln allocated by the US government
Bus services in Scotland and Wales are already being supported by the respective governments.
The two firms will continue operating Great Western Railway and the Southeastern franchise, respectively
“We firmly believe that a sale of these assets is the best way to unlock material value for all FirstGroup shareholders,”
Hedge fund Coast Capital, which owns 10% of the FTSE 250 transport firm, has said it will convene an EGM to force a vote on whether to sell the group's First Transit and First Student businesses
"We see considerable value that can be realised from improved operational performance, notably reduced insurance costs and higher First Bus margins, and the break-up of the group, which is clearly underway"
The franchise is run by a joint venture between FirstGroup and Hong Kong’s MTR
The news is likely to please some of the transport firm’s largest shareholders, which have been pushing for a review of the portfolio
Property tycoon Robert Tchenguiz has put out a scathing statement saying the travel group's management last week “misled or at best confused the public”
Coast Capital, which owns 10% shares in the firm, said that the firm’s North American and UK assets “do not belong together”
In the six months to 30 September, revenue was up 7% to £3.5bn, while net debt nearly doubled to £2bn
The Competition and Markets Authority has invited industry organisations and interested parties to comment on the transaction
The broker warned that investors could react to the new award with scepticism due to the firm’s “recent poor track record in rail franchising”
David Martin will replace Wolfhart Hauser, who stepped down in June after a failed attempt to oust him by activist shareholder Coast Capital
Only six out of 30 of UK rail franchises, including London underground and the not-yet operational Crossrail, do not have some sort of foreign owner
The FTSE 250 transport firm will run the franchise from 8 December as part of a JV with Italian state-backed rail operator Trenitalia
Coast Capital, an activist investor with a nearly 10% stake in the transport group, failed to remove any of the six directors it was seeking to oust at an EGM on Tuesday
In a letter to other shareholders ahead of a crunch meeting on Tuesday afternoon, Coast said it had been informed that chairman Wolfhart Hauser and CEO Matthew Gregory had told some investors that “everything is for sale at the right price”
