from the Times newspaper today..18 Apr 2018 08:24
The board of First Group is facing pressure from an activist shareholder to shake itself up amid speculation that the business could be broken up.
It is understood West Face Capital, a Canadian asset management firm, has told directors of the train and bus operator about concerns that they are unambitious, have not improved margins as promised and over the company’s corporate governance.
Last week it emerged that Apollo Management, one of the world’s largest private equity houses, had approached First Group, a company with a market value of £1.35 billion, with a takeover offer. The proposal was rejected by First, which argued that the offer at an unspecified price “fundamentally undervalues the company and is opportunistic in nature”.
The approach has set hares running in the City that First Group may be ripe for a break-up into its constituent parts. As First Rail, it operates the Great Western, South Western and Transpennine train services in the UK where it also has a nationwide bus presence. Its larger American businesses operate school yellow buses, Greyhound intercity coaches and local services. The group employs 100,000 people.
Its shares have been marooned for much of the past five years after a 2013 £615 million rescue rights issue. The stock price has risen by nearly 50 per cent before and after the news of Apollo’s approach, closing last night ¼p higher at 111¾p.