Aberdeen-based bus and rail giant FirstGroup said on Thursday the Takeover Panel has granted it a further extension — to August 18 — to allow discussions to continue on a takeover approach from US private equity group I Squared Capital Advisors (UK) LLP.

On June 9, FirstGroup said its board unanimously rejected a £1.23 billion cash and shares takeover approach from I Squared Capital Advisors.

The approach valued FirstGroup at up to 163.6p per share. FirstGroup shares are trading around 133p.

FirstGroup said on June 9 the cash component in the I Squared approach of 118p per FirstGroup share “significantly undervalues FirstGroup’s continuing operations and its future prospects” and the contingent right to up to 45.6p per FirstGroup share “does not provide shareholders with sufficient certainty.”

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.

On Thursday, FirstGroup said in a stock exchange statement: “On 23 June 2022, the board of FirstGroup plc announced that it was continuing discussions with I Squared Capital Advisors (UK) LLP in relation to a possible offer for the entire issued, and to be issued, share capital of the Company.

“In accordance with Rule 2.6(a) of the Code, I Squared was required, by not later than 5.00 p.m. on 21 July 2022, to either announce a firm intention to make an offer for the company in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

“These discussions are ongoing and in order to allow them to continue to progress, the board of FirstGroup has requested that the Panel on Takeovers and Mergers further extend the PUSU Deadline in accordance with Rule 2.6(c) of the Code.

“In light of this request, a further extension has been granted by the Panel and in accordance with Rule 2.6(a) of the Code, I Squared is required, by not later than 5.00 p.m. on 18 August 2022, to either announce a firm intention to make an offer for the company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for the company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

“This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code …

“There can be no certainty either that an offer will be made nor as to the terms of any offer, if made.”