FirstGroup (FGP)

Sector:

Commercial Transport

Index:

FTSE 250

133.30p
   
  • Change Today:
    -1.90p
  • 52 Week High: 187.70p
  • 52 Week Low: 133.10p
  • Currency: UK Pounds
  • Shares Issued: 615.47m
  • Volume: 1,581,365
  • Market Cap: £820.42m
  • RiskGrade: 282

FirstGroup faces shareholder battle over $4.6bn US deal

By Abigail Townsend

Date: Tuesday 18 May 2021

LONDON (ShareCast) - (Sharecast News) - FirstGroup has urged investors to back the sale of two US businesses after its largest shareholder said it would vote against the deal.
The London-listed bus and train group last month agreed to sell First Student and First Transit to Swedish private equity firm EQT Infrastructure for $4.6bn. But late on Monday, Coast Capital said fellow investors should reject the deal unless the terms were "rapidly and substantively improved".

The New York-based investment firm, which has a 14% stake in FirstGroup, argued: "The proposed transaction is the result of a suboptimal and incomplete process at an inopportune time, made worse by a distribution of proceeds which see long-suffering shareholders receiving just 12% of proceeds."

FirstGroup has pushed back, however, claiming Coast Capital's statement contained "numerous inaccuracies and speculations".

It said the sale had followed a "comprehensive and competitive process" and disputed Coast Capital's claims that the proposal was at a "significant negative premium to their book value", arguing that the net proceeds on sale were in fact above the book value as at 30 September 2020.

Addressing the proposed distribution of sale proceeds, it said: "The group has a number of liabilities. As previously set out, in determining the use of proceeds, the board has sought to balance returning value to shareholders while also making a necessary and substantial contribution to the UK pension deficit, reducing its debt - including repayment of Covid Corporate Financing Facility to the UK government - and addressing other longstanding liabilities."

It concluded: "The board unanimously recommends the transaction as being in the best interests of all shareholders and recommends shareholders vote in favour of the sale of the general meeting on 27 May."

As at 1345 BST, shares in FirstGroup were trading 3% higher at 83.06p.

Gerald Khoo, analyst at Liberum, said: "Coast Capital's key objections include the achieved valuation, that the auction was allegedly non-exhaustive, and the proposed return of value to shareholder should be considerably higher: £600m versus £365m proposed. On the latter point, we agree there is the opportunity to return more cash to shareholders.

"However, further re-leveraging towards management proforma 2x net debt/EBITDA limit would need an EBITDA recovery and confidence that the pandemic has run its course. It is not clear to us that this would be the case within the next six months."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

FirstGroup Market Data

Currency UK Pounds
Share Price 133.30p
Change Today -1.90p
% Change -1.41 %
52 Week High 187.70p
52 Week Low 133.10p
Volume 1,581,365
Shares Issued 615.47m
Market Cap £820.42m
RiskGrade 282

FirstGroup Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
11.07% below the market average11.07% below the market average11.07% below the market average11.07% below the market average11.07% below the market average
81.82% below the sector average81.82% below the sector average81.82% below the sector average81.82% below the sector average81.82% below the sector average
Price Trend
25.34% below the market average25.34% below the market average25.34% below the market average25.34% below the market average25.34% below the market average
63.64% below the sector average63.64% below the sector average63.64% below the sector average63.64% below the sector average63.64% below the sector average
Income
62.25% above the market average62.25% above the market average62.25% above the market average62.25% above the market average62.25% above the market average
60.00% above the sector average60.00% above the sector average60.00% above the sector average60.00% above the sector average60.00% above the sector average
Growth
24.36% above the market average24.36% above the market average24.36% above the market average24.36% above the market average24.36% above the market average
9.09% below the sector average9.09% below the sector average9.09% below the sector average9.09% below the sector average9.09% below the sector average

What The Brokers Say

Strong Buy 4
Buy 0
Neutral 2
Sell 0
Strong Sell 0
Total 6
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

FirstGroup Dividends

  Latest Previous
  Final Interim
Ex-Div 18-Jul-24 30-Nov-23
Paid 23-Aug-24 03-Jan-24
Amount 4.00p 1.50p

Trades for 31-Oct-2024

Time Volume / Share Price
16:55 44,372 @ 134.59p
16:55 291,031 @ 133.57p
16:35 970,885 @ 133.30p
16:35 8,102 @ 133.30p
16:35 770 @ 133.30p

FirstGroup Key Personnel

CFO Ryan Mangold
Chair Peter Lynas
CEO Graham Sutherland

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