First rejects takeover offer

FirstGroup has rejected the proposed takeover offer from I Squared Capital Advisors, saying it significantly undervalues its operations and future prospects.

On 26 May 2022, FirstGroup confirmed it had received a series of unsolicited, conditional proposals from I Squared Capital Advisors in relation to a possible offer for the entire issued, and to be issued, share capital of the company by funds managed by I Squared.

The potential deal was for as much as £1.2bn. The potential buyer offered to pay 118 pence per share and a contingent right to up to a further 45.6 pence per share based on the outcome of the First Transit earnout and the net proceeds realised from the Greyhound legacy assets and liabilities.

“Accordingly, the Board has unanimously rejected the Proposal”

In a statement, FirstGroup said: “The Board, having carefully evaluated the Proposal together with its advisers, concluded that the cash component of 118 pence per FirstGroup share significantly undervalues FirstGroup’s continuing operations and its future prospects, and the contingent right to up to 45.6 pence per FirstGroup share does not provide shareholders with sufficient certainty.

“Accordingly, the Board has unanimously rejected the Proposal.”

The rejection of the offer follows a statement from Schroders, FirstGroup’s largest shareholder, which described the bid from I Squared as ‘unattractive’.