(Alliance News) - FirstGroup PLC shareholder Coast Capital LLC again hit out at the transport firm's proposed US assets sale on Monday, accusing the company's board of falling short of its fiduciary duties.
Coast Capital and FirstGroup have frequently traded barbs over the contentious plan to sell the First Student and First Transit units. FirstGroup agreed on a deal in April to sell the assets to Swedish private equity firm EQT AB for up to GBP3.3 billion.
"Coast Capital and its fellow shareholdersin FirstGroup have long believed that the company's US & UK businesses do not belong together. However, we also understand that a sale of these best-in class public transport operations through a rushed and unexhaustive process in the middle of the largest pandemic in 100 years, at a significantly lower valuation than any comparable transaction, and for less than what FirstGroup acquired First Student & First Transit for 14 years ago, is unacceptable," Coast Capital said.
The New York-based investor owns about a 14% stake in FirstGroup.
The investor added: "The fact that the board is unwilling or incapable of negotiating a deal which delivers even a modest improvement in sale terms is further proof of a tired and inexhaustive process. The lack of fairness opinion rendered by an independent advisor, as well as increasing evidence obtained by Coast Capital that more attractive alternatives exist which continue to be ignored, are all evidence of a board failing to meet its fiduciary responsibilities."
Coast Capital accused FirstGroup of portraying it as a lone wolf, despite more shareholders now speaking out against the proposed sale.
Both Schroders and Glass Lewis are also against the deal.
Last Wednesday, Coast Capital argued that when FirstGroup outlined its net proceeds from the sale, it included the earnout, a sum it is not guaranteed to receive. Coast Capital said the net proceeds of the sale will be GBP2.19 billion, against a September net asset value of GBP2.51 billion.
Last week Tuesday, FirstGroup said an earlier statement by Coast Capital contained "numerous inaccuracies and speculations".
FirstGroup shares were 0.8% higher at 84.20 pence each in London on Monday shortly before midday.
By Eric Cunha; ericcunha@alliancenews.com
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