Badminton star-turned hedge fund tycoon takes a swipe at FirstGroup

The activist investor Tom Sandell is not a man to be brushed off lightly, as troubled trains and buses operator FirstGroup is discovering.

Mr Sandell, a Swedish born New Yorker, has racked up personal wealth of more than $1bn (£610m) by buying stakes in businesses and persuading (let's not say "strong-arming") them to make changes that increase the value of his stake.

Having watched the travails of FirstGroup for several years, aided by his knowledge of its US bus operations, Mr Sandell, 52, broke cover last month to agitate for a break-up of the business.

He urged the sprawling company to sell its Greyhound coaches arm, spin off the remaining American operations and invest the proceeds in its UK bus and rail franchises such as First Capital Connect. In other words, to get back to basics.

First snubbed him, saying it had a turnaround plan of its own, thankyou very much.

But yesterday, the bespectacled former badminton prodigy returned to the fray, saying he was "disappointed that the company has chosen to characterise the proposals as containing 'structural flaws' and 'inaccuracies'". It should "reconsider its premature rejection of the proposals", he said.

It's not as if Mr Sandell hasn't been here before, having learned his trade at the knee of such Wall Street takeover titans as Ace Greenberg at Bear Stearns and working on some of the most audacious takeovers and restructurings of modern times, including Kirk Kerkorian's takeover of Chrysler.

Yesterday's renewed pop at FirstGroup came just a day after he filed a lawsuit against the management of another management team he's seeking to influence – this time a US-wide restaurant chain, Bob Evans. He's also taking a pugilistic stance over what he sees as the undervalued share price at a pipeline company called Spectra.

His European upbringing – he studied at Uppsala university in Sweden before working in Paris until finally succumbing to headhunters' calls from Wall Street – is seen as one of his greatest strengths. Bear Stearns, in those days the daddy of takeovers, was one of the first to spot big deal opportunities in the 1990s in Europe.

By 1998, Mr Sandell had left to set up his own hedge fund, Castlerigg, largely with investments from wealthy Swedes. He was soon winning awards for performance.

Yesterday, he claimed he was also winning over FirstGroup's shareholders, although a muted reaction in the share price was showing little sign of that. Analysts did not see the logic of making disposals, and could not immediately think of a long list of potential buyers.

FirstGroup sources responded that "nothing had changed", pointing to flaws in Mr Sandell's plans, including the cost of spinning off businesses in the US and potential opposition from pension trustees overseeing the company's £250m deficit.

Nonetheless, Mr Sandell will keep pushing: "We firmly believe that the company should take advantage of the current favourable market conditions to maximise the chance of success at both FirstGroup US and New FirstGroup in the long term. The favourable market conditions will not continue indefinitely, and the options available to the company now may not be available in the future."

He is said to be particularly irritated that the FirstGroup board will not even discuss his proposals. Word is, he's coming to London in the next couple of days. Don't expect him to leave quietly.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
i100
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
ebooks
ebooksA celebration of British elections
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
Arts and Entertainment
The Queen (Kristin Scott Thomas) in The Audience
theatreReview: Stephen Daldry's direction is crisp in perfectly-timed revival
Sport
football
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power