A US activist investor has called for a meeting of FirstGroup PLC (LON:FGP) shareholders as it proposes a shake-up of the South Western Railway and Greyhound bus operator a year after it rejected a takeover offer from a rival fund.
Coast Capital Management, which last week upped the stake held by its Hermes-Golden vehicle to 9.77%, has proposed getting rid of six of FirstGroup's current eleven board members, including new chief executive Matthew Gregory and chairman Wolfhart Hauser. Coast had previously called for the board to step down last November.
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James Rasteh, a partner at the New York-based hedge fund, told The Sunday Times the current directors ranged from “shades of super destructive to extraordinarily under-qualified”. He wants shareholders to replace the board with seven of Coast’s nominees, including former Tory transport minister Steve Norris as chairman.
FirstGroup, which last May rejected an all-cash offer from private equity firm Apollo Management, appointed a new chief financial officer and non-executive director this month. Chief executive Matthew Gregory was promoted from CFO in November, after previous boss Tim O’Toole stepped down after the Apollo bid was rejected.
The Aberdeen-based transport group said members of the board had met Coast Capital “a number” of times over more than a year and provided detailed responses to several proposals.
“The board of FirstGroup are focused on delivering shareholder value and are confident that the company has the right team with the right experience and plans in place to do so. The board regularly reviews its composition to ensure it maintains an appropriate balance of skills and expertise, and new board members have been added, as recently as earlier this month.”
To be passed at a general meeting, at least 50% of shareholders will need to back the proposals.