By Mark McSherry

Aberdeen-based international bus and rail giant FirstGroup said on Tuesday it has granted activist shareholder Coast Capital Management the extraordinary general meeting it had requested and has scheduled the EGM for June 25.

Coast Capital, which controls 9.77% of FirstGroup’s shares, had requisitioned a general meeting to consider its resolutions to remove six of the transport group’s current directors and replace them with seven of Coast Capital’s own nominees.

However, in a long stock exchange statement, FirstGroup recommend unanimously that FirstGroup shareholders vote against all of the Coast Capital resolutions.

“Coast Capital, founded in September 2017, is a small New York based hedge fund, self-styled as an activist investor,” said FirstGroup.

“Based on its many interactions with Coast Capital to date and its claims and proposals, the board believes that Coast Capital is an opportunistic, self-interested player that is only focused on short-term gains.”

Last week, FirstGroup shares rose after it said it will sell its Dallas-based Greyhound bus business and put the group’s emphasis on its First Student and First Transit businesses in North America.

In a major strategic overhaul that some shareholders have been pushing for, FirstGroup CEO Matthew Gregory told reporters last week the company was moving the emphasis of the group to the United States. 

FirstGroup has been under pressure from activist investors including Coast Capital Management to split the group’s UK and US businesses.

Gregory refused, however, to comment to reporters on whether FirstGroup would consider moving its headquarters to the US or listing there in the longer term.

FirstGroup said last week it will rationalise its portfolio “with the group’s future emphasis on First Student and First Transit, our core North American contracting businesses, which have the greatest potential to generate sustainable value and growth over time.”

On its First Rail business, FirstGroup said last week: “… given our reduced expectations for our two most recently awarded franchises, we have concerns with the current balance of risk and reward being offered. 

“We await the outcome of the UK government’s review into the structure of the whole rail industry chaired by Keith Williams as it seeks to address these and other industry issues. 

“Any future commitments to UK rail will need to have an appropriate balance of potential risks and rewards for our shareholders.”