FirstGroup (LSE:FGP) PLC confirmed plans to return £500mln to shareholders via a tender offer at 105p per share, a 9% premium to yesterday's share price.
The bus and train operator flagged the payout in July when it completed the disposal of its First Student and First Transit businesses for US$3.1bn, when it also increased the amount to £500mln from £375mln originally.
Coast Capital Management, an activist investor that heavily criticised the disposal and the price achieved, agreed to support the plan and will tender all its shares.
If the full £500mln is not tendered, FirstGroup (LSE:FGP) said it will make up the gap through a share buyback.
The FTSE 250 group added it will consider a further payout once the First Transit earnout of up to US$240mln crystallises, retained properties are sold and the Greyhound deferred consideration is triggered.
David Martin, chief executive, said the tender “marks the culmination of our portfolio rationalisation strategy, as announced in December 2019.”
“The policy backdrop in the UK has never been more supportive and public transport has a critical role to play in helping communities and economies build back better and more sustainably.”