FirstGroup rejects US hedge fund break-up proposal
FirstGroup says the plan was “not compelling” and contained “a number of structural flaws and inaccuracies”.
Wednesday 11 December 2013
FirstGroup has rejected pressure from a US investor to sell-off its North American bus business in a bid to boost shareholder value.
New York-based hedge fund Sandell Asset Management, which has a 3.1 per cent stake in FirstGroup, wrote to the transport group’s board calling for a spin-off and flotation of its US school and transit businesses, and the sale of Greyhound, its inter-city bus provider.
But FirstGroup said in a statement today that the plan was “not compelling” and contained “a number of structural flaws and inaccuracies”.
The news comes as FirstGroup’s rival Stagecoach reported a strong set of first half results and underlined the importance of North America to its business.
Stagecoach boss Martin Griffiths said: “I’m very positive on our US business. It’s the fastest growing part of the group.“
Revenue at the North American division jumped 17.2 per cent to $238.3m, thanks to a 22 per cent increase in Stagecoach’s Megabus business there.
Griffiths said: “We’re looking at further geographic expansion of Megabus routes and looking at some new products including Megabus gold and potentially thinking about sleeper buses in the longer term.”
Across the group Stagecoach saw profit reach £98.5 million, up from £96.8 million a year earlier. Revenue grew from £1.4bn to £1.47bn.
Profit from Stagecoach’s London bus business was £9.6m, up from £8.3m, but revenues were down.
Griffiths said he “fully expects” to hit full-year profit targets.
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
- 3 The enemy within: People who hear voices in their heads are being encouraged to talk back
- 4 British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia