Great Western Coffee Shop

June 2019 General Meeting

On 17 May 2019, the Board of FirstGroup plc (the ‘Company’) received a requisition notice from State Street Nominees Limited (acting as custodian for a company managed by Coast Capital), a shareholder holding around 10% of the Company’s shares, requisitioning a general meeting to consider resolutions to remove six of the current Directors and replace them with seven of Coast Capital’s own nominees. A Notice of Meeting has been despatched or otherwise made available to shareholders.

The General Meeting will 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.

As explained in the Notice, the Directors strongly believe that the Coast Capital Resolutions are not in the best interests of the Company, its shareholders as a whole or its wider stakeholders and recommend unanimously that FirstGroup shareholders vote against all of the Coast Capital resolutions.

The company which manages Bristol’s buses and trains is facing a showdown with its biggest investor tomorrow (June 25) when a crunch vote on its future takes place.

FirstGroup, which manages First Bus, GWR and South Western Railways, and US shareholder Coast Capital have been exchanging barbs since the hedge fund said it wanted to replace six board members with seven of its own in a ‘hostile’ takeover bid.

Coast has a 10 per cent stake in FirstGroup and has already persuaded the group to split up its assets.

The firm’s chief investment officer, James Rasteh, told the BBC FirstGroup doesn't "know how to manage the business."

However, FirstGroup says Coast’s turnaround plans “lack credibility, are irresponsible and are not in the best interests of all shareholders and other stakeholders.”

The company says people should be "in no doubt" Coast Capital are trying to take over a big plc company without actually having to buy it.

James Rasteh, Coast’s chief investment officer, told City A.M: “There is no doubt that winning the West Coast franchise will result in further value destruction in a UK rail business which has already destroyed vast amounts of shareholder capital.

“It would also move First Group further away from their recently stated strategic objective of focusing more on their highly valuable US assets and businesses. Against this backdrop, there is no doubt that institutions who vote for the current chairman and CEO are not looking after their investors’ best interests.”

He added: “We also put the board of First Group on notice that, after the EGM, Coast will reserve the right to contact the secretary of state for transport and warn him of the risks of contractual non-complete if a contract is awarded by his department to First Group. As the company’s largest shareholder, we will not stand by and watch further wanton value destruction under this board.”

The ouster squad failed - see here (https://otp.tools.investis.com/clients/uk/first_group/rns/regulatory-story.aspx?cid=858&newsid=1302221)

There are some lovely voting statistics to play with in there ... but as a rough order of maginitude, for every vote cast to throw out an existing director, two votes were cast to keep him in place.  And for every vote to appoint a new director suggested by Coast Capital, there were two votes against.   All the more significant ratios if you were to exclude the votes of the shareholding of Coast Capital and their team. 

Hmm...not sure about Mr Winestock though...54/46 isn't much of a confirmation!

One or two set of numbers stand out - there clearly are popular and unpopular current directors, and potential appontees who have clearly made their mark on the electorate in both positive and negative lights.