FirstGroup evaluates £1.23bn takeover approach

Aberdeen-based bus and rail giant FirstGroup plc announced it has received a series of unsolicited, conditional proposals from private equity group I Squared Capital Advisors (UK) LLP in relation to a possible offer to acquire the company.

The latest approach values FirstGroup at up to 163.6p per share or £1.23 billion in cash and shares.

FirstGroup shares rose about 8% to around 128p to give the Aberdeen firm a current stock market value of about £967 million.

FirstGroup is the UK’s biggest train operator as the main shareholder in four UK rail franchises: Great Western Railway, South Western Railway, TransPennine Express and Avanti West Coast.

The firm is also the UK’s second-biggest operator of regional buses, serving two-thirds of the UK’s 15 largest conurbations including Glasgow, Bristol and Leeds.

“The board together with its advisers, is currently evaluating the latest approach, received yesterday evening, which provides for a cash component of 118 pence per share and a contingent right to up to a further 45.6 pence per share based on the outcome of the First Transit earnout and the net proceeds realised from the Greyhound legacy assets and liabilities,” said FirstGroup.

“The previous approaches were all unanimously rejected by the board.

“FirstGroup shareholders are strongly advised to take no action in relation to the approach from I Squared.

“A further announcement will be made if and when appropriate.”

I Squared is now required to either announce a firm intention to make an offer for FirstGroup by June 23 or walk away.