17th May 2021 19:10
(Alliance News) - FirstGroup PLC's largest individual shareholder has called on the transport company's investors to vote against the proposed sale of its First Student and First Transit assets.
Coast Capital LLC, which owns about a 14% stake in FirstGroup, said the proposed deal "is the result of a suboptimal and incomplete process at an inopportune time". What's more, Coast Capital said "long-suffering shareholders" will receive just 12% of the sales proceeds.
"Coast Capital has already been contacted by many shareholders who express frustration with this deal, and proposed use of proceeds," the New York-based investor said.
"Shareholders are being asked to vote in favour for a negative premium for their most valuable businesses after just 17 days to review, in the absence of a fairness opinion and in the absence of a concrete timetable for the full distribution of proceeds."
FirstGroup agreed a deal in April to sell the assets to Swedish private equity firm EQT AB for up to GBP3.3 billion. The GBP3.3 billion headline enterprise value includes an earnout of up to GBP170 million for First Transit.
FirstGroup shares closed up 1.5% at 80.50 pence each in London on Monday.
Coast Capital added: "Unless this proposal is meaningfully improved, we recommend that all stakeholders repudiate and vote against this flawed and inadequate proposal on 27 May. If an improved deal is not deliverable within the existing construct, the company should retain its key assets and pursue a complete, competitive, and transparent process that looks at a wide range of value creation alternatives with the benefit of schools reopening, a better market and macro backdrop as the pandemic is progressively brought under control."
By Eric Cunha; [email protected]
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