FirstGroup PLC (LON:FGP) saw its shares go off the rails on Tuesday after private equity firm Apollo Global Management LLC (NYSE:APO) confirmed it would not be making an offer for the transport operator.
The FTSE 250-listed group - which runs the South Western Railway franchise and owns Greyhound buses in the US - revealed last month that it had received a preliminary and highly conditional indicative proposal from Apollo.
READ: FirstGroup “unanimously rejects” potential all-cash takeover offer from private equity firm Apollo
Apollo had until 1600 GMT on Wednesday to make a firm offer or walk away and has now decided not to bid for the business.
In a statement noting the announcement by Apollo Global, the UK firm said: “In recent weeks the Board of FirstGroup received two preliminary and highly conditional indicative proposals from Apollo relating to a possible cash offer for the entire issued and to be issued ordinary share capital of FirstGroup.
“Having considered them in detail, the Board of FirstGroup concluded that the Proposals fundamentally undervalued the Company. Accordingly, the Board of FirstGroup unanimously rejected the Proposals.”
It added: “The Board of FirstGroup continues to believe in the strong prospects for shareholder value creation available to the Company.”
FirstGroup said it will publish its full-year results for the year to 31 March 2018 on 31 May and will update the market on the company's outlook at that time.
In lunchtime trading in London, FirstGroup shares were 6.8% lower at 103.5p.
-- Adds FirstGroup statement; updates share price --