(Reuters) - Two major FirstGroup (FGP.L) shareholders on Monday called for the British bus and train operator to sell its U.S. assets as part of a portfolio overhaul which already includes the planned sale of North American intercity bus service Greyhound.
Coast Capital Management and Robert Tchenguiz separately asked Aberdeen-based FirstGroup, which is also assessing options to separate its British bus division, for more clarity on its plans.
FirstGroup, which last week reported a bigger first-half loss, has said it would focus on its core contracting business in North America, including the First Student school bus service and First Transit transportation service.
Coast Capital, which is FirstGroup’s second-biggest shareholder with a more than 10% stake, joined Iranian-born property investor Tchenguiz in calling for it to sell the U.S. assets, saying there were no synergies with its British ones.
“A sale of the U.S. assets would not only release meaningful value for shareholders, but would also allow these businesses and their invaluable employees and managers to thrive under a well-capitalized owner,” Coast Capital said.
Tchenguiz, who holds a 4.7% economic interest in FirstGroup and is its largest individual shareholder, said here he would seek a shareholder meeting and urged its new chairman to review the U.S. operations.
David Martin succeeded Wolfhart Hauser this year after the former chairman left following a shareholder rejection of a Coast Capital proposal to overhaul its board. (here)
London-listed FirstGroup, in response to Tchenguiz, said its First Student and First Transit were “valuable assets and well positioned ... with profitable growth”.
“The board has been consistent and clear that the objective is to realize value and therefore were a credible and deliverable offer to be received for these or any other business in the portfolio then, of course, the board would give that serious consideration,” the company said.
First Student and First Transit accounted for 60% of the company’s operating profit in fiscal 2019.
FirstGroup did not immediately respond to a request for comment on Coast Capital’s statement.
FirstGroup put Greyhound up for sale this year, partly due to competition from low-cost airlines and more recently after a drop in demand.
Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru; Editing by Maju Samuel and Alexander Smith