14th Jul 2014 08:07
LONDON (Alliance News) - FirstGroup PLC Chairman John McFarlane has ruled out a break-up of the UK-based bus and rail group as the demands from its US activist investor lacked financial logic, according to a report in The Financial Times.
The FTSE 250-listed company has faced investor backlash over its annual remuneration report, led by Sandell Asset Management Corp which in June said it intends to vote against the report due to concerns regarding corporate governance practices at the transportation company.
According to the newspaper, Sandell has also called for the group to sell its Greyhound intercity US coach service and spin off its US school bus and transit businesses.
McFarlane told the Financial Times, "If they want to get the value out of this, it?s going to take time and there is no alternative... Just get used to it; settle down.?
He said there was no financial logic to the sell-off plan and it lacked shareholder support; ?If you sell a business that hasn?t actually performed before the upside, you?ve given the upside to third parties and not to your existing shareholders,? he said.
McFarlane also said that he expected the company's plan to almost double the pay package of chief executive Tim O?Toole ? to GBP1.19 million ? to pass at FirstGroup?s annual general meeting in Aberdeen this week.
Shares in the transport firm were trading 1.5% higher at 128.90 pence per share Monday.
http://www.ft.com/cms/s/0/a7d6bc86-0922-11e4-906e-00144feab7de.html#axzz37QYoWFQ2
By Alice Attwood; [email protected]; @AliceAtAlliance
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