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April 24, 2018, 11:47:14 am *
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Author Topic: Possible takeover offer - Firstgroup  (Read 538 times)
grahame
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« on: April 11, 2018, 10:54:15 pm »

http://otp.investis.com/clients/uk/first_group/rns/regulatory-story.aspx?cid=858&newsid=998669

Quote
Released : 11.04.2018

For immediate release

11 April 2018

FirstGroup plc
Statement re possible offer

The Board of FirstGroup plc (“FirstGroup” or the “Company”) notes the recent movement in FirstGroup share price and confirms that it has received a preliminary and highly conditional indicative proposal from Apollo Management IX L.P. (“Apollo”) relating to a possible cash offer for the entire issued and to be issued ordinary share capital of FirstGroup (the “Proposal”). The Board of FirstGroup has considered the Proposal in detail and believes that it fundamentally undervalues the Company and is opportunistic in nature. Accordingly, the Board of FirstGroup has unanimously rejected the Proposal.

There can be no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made. A further announcement will be made in due course if and when appropriate.

In accordance with Rule 2.6(a) of the City Code on Takeovers and Mergers (the "Code"), Apollo must, by not later than 5.00 p.m. on 9 May 2018, 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 in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

This announcement has been made by FirstGroup without the agreement or approval of Apollo.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on FirstGroup’s website at www.firstgroupplc.com by no later than 12 noon (London time) on 12 April 2018. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

The person responsible for arranging the release of this announcement on behalf of FirstGroup is Michael Hampson, Group General Counsel and Company Secretary.
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bignosemac
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« Reply #1 on: April 11, 2018, 11:10:11 pm »

https://en.m.wikipedia.org/wiki/Apollo_Global_Management

GWR and Ceasar's Palace as bedfellows? Interesting.

That FirstGroup have unilaterally released details of the approach is a little unusual. Are the board rattled?
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Lover of trains and all things rail related. That love and enjoyment has been severely dented in recent years by FGW/GWR.
grahame
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« Reply #2 on: April 11, 2018, 11:27:36 pm »

From The Guardian

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Bus and rail company FirstGroup has rejected a takeover approach from the American private equity group Apollo, the British transport operator has announced.

After shares rose more than 7% during trading on Wednesday amid rumours of a takeover bid, the board of FirstGroup issued a statement confirming an initial proposal had been made by Apollo Management but had been unanimously rejected, dismissing it as “opportunistic”.

The Aberdeen-based company, which runs several well-known travel operations, including Great Western railways, the American Greyhound Bus brand and First Bus, said the proposal was “preliminary and highly conditional”. The board said it rebuffed the approach because it “fundamentally undervalues” FirstGroup and is “opportunistic in nature.”

“There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made. A further announcement will be made in due course if and when appropriate,” the FirstGroup board said in a statement.

Under the UK’s takeover rules, Apollo Management has until 9 May to clarify its intention to make an offer.

Last year, Apollo raised the largest private equity fund in history, totalling $24.6 billion earmarked for investments in the US, Canada and Western Europe.

FirstGroup was founded in 1995 through a merger of Badgerline and GRT Bus Group, growing into an international company with several rail and bus operations in the UK, Ireland, Canada and the United States. The firm now has around 100,000 employees and is listed on the London Stock Exchange, forming part of the FTSE 250 index.

The FirstGroup stock price had slipped since the start of the year amid Brexit concerns. Last summer the bus and train operator warned that its UK business was likely to be hit by falling consumer confidence following the decision to leave the EU.
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grahame
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« Reply #3 on: April 11, 2018, 11:30:53 pm »

And The BBC

Quote
Rail and bus operator FirstGroup has rejected a takeover offer from US private equity firm Apollo Management.
The FTSE-250 transport group disclosed the bid approach after its share price jumped in late trading in London.

Aberdeen-based FirstGroup, which has about 100,000 employees, runs Great Western Railway and America's iconic Greyhound bus services.

The company said in a statement that Apollo's offer "fundamentally" undervalued the company.

FirstGroup did not reveal any financial details about the offer, which was disclosed more than two hours after the London stock market closed. The company's shares finished 7.4% up.

FirstGroup, whose other operations include the Heathrow Airport Connect service and First Bus, had revenues of £7.5bn last year.

The company said in its statement: "The board of FirstGroup has considered the proposal in detail and believes that it fundamentally undervalues the company and is opportunistic in nature. Accordingly, the board of FirstGroup has unanimously rejected the proposal."

FirstGroup added that its disclosure of the approach was made "without the agreement or approval of Apollo".

Poor trading

Under the UK's takeover code, Apollo has until 9 May to launch a formal bid.

The company is one of the big US buyout firms, with more than $200bn (£140bn) of investments stretching from finance, food and property. It owns the casino operation Caesars Entertainment Corporation.

Apollo's approach comes after FirstGroup warned in February of trading weakness due to strong competition in the US. FirstGroup shares fell as low as 77p.

FirstGroup has also been targeted by Canadian activist investor West Face Capital, which disclosed a 5% stake in the business last June.

The UK company has not paid a dividend to shareholders since it raised £615m from a rights issue in 2013 to pay down debt, after it lost a contract to run Britain's West Coast rail franchise.
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grahame
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« Reply #4 on: April 15, 2018, 08:03:40 am »

Further comment from This is money on the company bidding, and its boss

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The private equity chief battling to buy Great Western Railway owner First Group was paid £134million last year.

American businessman Leon Black, 66, is pursuing the Aberdeen-based rail-and-bus operator through Apollo Global Management, which he set up in New York in 1990.

His windfall last year was boosted by dividends and took his earnings in the past three years to £316.5million, cementing his position as one of the world’s best-paid bosses.

Black, who is worth an estimated £4.4billion, has acquired a portfolio which includes Norwegian Cruise Line, whirlpool brand Jacuzzi and Caesars Entertainment, owner of Caesars Palace.The married father of four has a keen interest in art and has spent millions on pieces by Raphael and Picasso. In 2012 he bought one of four versions of Edvard Munch’s The Scream for £84million – the highest price paid for a work of art at that time.

But he faces a fight to take control of First Group, which also owns the Transpennine Express and South Western Railway as well as Greyhound buses.

Rejecting Black’s approach this week, First Group said it ‘fundamentally undervalues the company and is opportunistic in nature’.
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