Aberdeen-based international bus and rail giant FirstGroup plc said on Tuesday its shareholders rejected proposals from New York activist hedge fund Coast Capital Management to appoint a new chief executive and overhaul its board.
However, FirstGroup said its chairman Wolfhart Hauser will not seek re-election at the firm’s AGM on July 25, 2019, a date when David Robbie, senior independent director, will become interim chairman to “oversee a formal and rigorous process to select a new chairman …”
Bowing to investor pressure, FirstGroup last month put its iconic North American bus line Greyhound up for sale.
Coast Capital, which controls 9.77% of FirstGroup’s shares, had requisitioned Tuesday’s extraordinary general meeting to consider its resolutions to remove six of FirstGroup’s current directors and replace them with seven of Coast Capital’s own nominees.
In a stock exchange statement, FirstGroup said: “The FirstGroup board is pleased that shareholders voted decisively against Coast Capital’s attempt to take control of the company by defeating all of the resolutions that were put to today’s meeting, and notes that, on average, other shareholders voted more than 4 to 1 against Coast Capital’s resolutions.
“The board also notes that more than 20% of shareholders voted in favour of several resolutions against the board’s recommendation.
“The board takes seriously its responsibility to understand shareholders’ opinions and will continue to engage with our investors over the coming weeks to discuss any views they may have, as reflected in the votes on those resolutions, as part of its ongoing programme of engagement.
“We welcome the support from, and engagement we have had with, our shareholders over recent weeks.
“The board is confident that the clear path forward for the business that was announced on 30 May 2019 is the right strategy to deliver enhanced sustainable value to all shareholders.
“The board also believes it has the right management to execute this strategy effectively and at pace.
“This team is committed to unlocking value for shareholders and, under Matthew Gregory’s leadership, is already delivering the operational progress and momentum that will be the foundation for FirstGroup’s future direction.”
Wolfhart Hauser said: “Having renewed the board through the appointment of independent directors with a diverse range of skills and expertise focused on the future of mobility services and overseen the appointment of Matthew Gregory as chief executive and Ryan Mangold as chief financial officer to drive delivery of the strategy, it is now time for me to move on.
“I am confident that the clear path forward laid out for the group in our strategy announcement on 30 May is the best way to deliver enhanced sustainable value to all shareholders, and that the board and management team will execute these plans at pace.”
Coast Capital Management said in a statement it was pleased to accept the resignation of Hauser, which it views as “a constructive first step in the direction of finally achieving full value for shareholders.”
Coast Capital added that FirstGroup “deserves a board which is populated with directors who have the relevant experience and who act to the benefit of all shareholders.
“We will continue to pursue this goal vigorously.”