FirstGroup shareholder launches battle for board

UPDATE 2 — Aberdeen-based bus and rail giant FirstGroup said major shareholder Coast Capital, which holds 9.77% of FirstGroup, called for a general meeting and is proposing resolutions to take control of the board “by removing six of the current eleven directors and appointing seven of their nominees.”

FirstGroup shares have risen about 20% in the past month amid big changes on the firm’s board and as analysts rethink prospects for the firm under new CEO Matthew Gregory and chairman Wolfhart Hauser.

FirstGroup is a major provider of transport services in the UK and North America, with about £6.4 billion in revenue and around 100,000 employees.

In North America, the firm’s First Student business is the largest student transportation business with 42,500 yellow school buses, and its Greyhound bus business is the only nationwide operator of scheduled intercity coaches.

In the UK, First Bus carries 1.6 million passengers a day, and First Rail carried more than 260 million passengers last year.

“FirstGroup plc announces that it has received a requisition notice dated 10 May 2019 from Hermes-Golden Limited, a company managed by Coast Capital Management LP, to call a general meeting of the company,” said FirstGroup in a stock exchange statement.

“Coast Capital, who have notified the company that it holds 9.77% of the company’s issued share capital, have proposed resolutions to take control of the board of FirstGroup by removing six of the current eleven directors and appointing seven of their nominees.

“The board of FirstGroup are focused on delivering shareholder value and are confident that the company has the right team with the right experience and plans in place to do so.

“The board regularly reviews its composition to ensure it maintains an appropriate balance of skills and expertise, and new board members have been added, as recently as earlier this month.

“As previously indicated to the market, the company will be releasing its full year results and updating on progress and strategy on 30 May 2019.

“FirstGroup considers the views of all shareholders and, accordingly, will continue to engage with Coast Capital having attempted to do so constructively for more than a year.

“The company’s engagement with Coast Capital has included detailed responses to several proposals and has involved a number of meetings with the chairman and with senior management.

“The board will be writing to shareholders regarding the requisition notice in due course.”