Major First shareholder 'demands' First pull out of UK railways

[whole diary]

[grahame]

From City A.M.

Activist hedge fund Coast Capital has issued a list of demands against First Group, including that it pull out of Britain's railways, split its UK^▸ (United Kingdom) and US assets and overhaul its board.

Coast, a top ten shareholder in First, has said the group should separate its US assets, which it claims have a "much higher independent valuation" than its UK assets, to generate £3bn in capital that could be used for reinvestment, debt reduction and pension top-ups.

Coast will pitch its five-point plan for a new strategy tomorrow.

In the US, First runs intercity coach services in North America, where it serves 43 states.

Longer article continues

[martyjon]

Article on BBC^» (British Broadcasting Corporation - home page) R4 financial news about this story.

Claim by the spokesman for the investor that (my words) First Group shovelled £400 million into the firebox with no hope of any return on this sum to shareholders. The named investor is said to hold 10% of Firsts shares and has called an Extraordinary General Meeting to effect a board shake up and remove 6 members of the board from office. Also claimed that the First Board are prevaricating over the calling of the EGM. Investor also calling for First Group to exit the rail business. In bathroom/shower at time of broadcast so didn't catch all of comments/interview but seems there is increasing investor unrest in the company with no prospect of dividends resuming in the near future.

[GBM]

From the RMT^▸ (National Union of Rail, Maritime & Transport Workers) to members

3rd June 2019
 
TO ALL FIRST GROUP MEMBERS
 
Dear Colleagues
 
BUSINESS REORGANISATION - FIRST GROUP
 
As you may have seen in the news First Group UK^▸ (United Kingdom) (made up of First Bus and First Rail), made an announcement last week that it was undertaking a major business reorganisation which would see First Bus separated from the rest of their operations. Correspondence has been received from the company outlining their strategic plan which includes the sale of their bus section and details the financial difficulties they are experiencing in the railway sector, which could also be impacted by these changes.
 
I have written to First Group today seeking an urgent meeting where we will be seeking firm commitments on job security and the retention of pay, terms and conditions and pension arrangements for all our members employed by or associated with First Group. Matters are currently at an early stage but we will keep members fully informed of developments as matters progress.   
Yours sincerely,
 
Mick Cash
General Secretary
www.rmt.org.uk/          www.rmtv.org.uk/

[grahame]

Extra Shareholder's meeting ...

General Meeting to be held at 2.00 p.m. on 25 June 2019 at De Vere Grand Connaught Rooms, 61-65 Great Queen Street, Holborn, London, WC2B 5DA

[Richard Fairhurst]

US bus contracts, US school buses, and a legacy UK^▸ (United Kingdom) rail division are a very odd fit. I expect there are other companies running their slide-rules over First UK Rail at the moment, even if First hasn't formally said it's for sale.

[grahame]

From Daily Business

Train and bus company FirstGroup, which last week announced a break-up plan, has accused a rebel investor group of being an “opportunistic, self-interested player that is only focused on short-term gains”.

The Aberdeen-based company has agreed to hold a shareholder meeting on 25 June, despite issuing a strongly-worded rebuke to Coast Capital.

It said Coast, which owns 10% of FirstGroup’s shares. had plans which were “naive and vague assertions with no specific details around execution”.

The rebel shareholder wants to remove six board members and replace them with their own representatives.

FirstGroup said in a statement: “The directors strongly believe that the Coast Capital resolutions are not in the best interests of the company.”

The company last week put its Greyhound US coach business up for sale as part of an overhaul that Coast had been requesting.

New chief executive Matthew Gregory, who is one of the executives targeted by Coast, also announced a review of its bus and rail operations, stating that it had concerns with the “current balance of risk and reward” over bidding for more UK^▸ (United Kingdom) rail franchises.

The group will focus on First Student, the biggest provider of school transportation in the US with a fleet of 42,000 buses, and First Transit, a North American bus company.

[grahame]

And from The Herald (Scotland}

FIRSTGROUP has launched a stinging attack on the US activist investor campaigning for the removal of its chairman and chief executive, branding its plans “inconsistent” and “irresponsible”

Coast Capital, the biggest shareholder in FirstGroup with a near 10-per cent stake, has mounted a public attack on the performance of the transport giant, claiming its current board has presided over a “track record of value destruction and under-performance”. It wants to remove six of the company’s eleven directors, including chief executive Matthew Gregory and chairman Wolfhart Hauser, and replace them with seven of its nominees.

[Timmer]

Unlikely to succeed unless other shareholders have similar views to those held by Coast Capital.