First shareholder calls takeover bid ‘unattractive’

FirstGroup‘s largest shareholder, Schroders, has described a potential takeover bid for the operator as ‘unattractive’.

The unsolicited offer came from I Squared Capital Advisers, an independent global infrastructure investment manager. The potential deal could be for as much as £1.2bn. The potential buyer is offering to pay 118p per share and a contingent right to up to a further 45.6p per share based on the outcome of the First Transit earnout and the net proceeds realised from the Greyhound legacy assets and liabilities.

Andy Simpson, UK Equity Fund Manager, Schroders, said: “As the largest shareholder in FirstGroup, we consider the level and structure of the bid approach from I Squared Capital Advisors to be unattractive.

“The proposal is highly conditional and leaves shareholders exposed to downside risks at a time when we believe the stand-alone company has attractive growth prospects, a strong balance sheet and a depressed valuation.

“In short, as an active manager focused on the long-term interests of our clients, we firmly believe that any offer needs to fairly reflect the attractive characteristics and scarcity value of the underlying assets before it is worthy of consideration.”