UK's FirstGroup faces more pressure over EQT deal (updated)

Banyan Gold

24/05/2021 14:16

(Adds Glass Lewis recommendation, details on shareholders)
    May 24 (Reuters) - FirstGroup's  FGP.L  biggest investor on
Monday again asked shareholders of the London-listed transport
operator to vote against the company's sale of two North
American bus businesses, while proxy advisory firm Glass Lewis
joined the opposition.    
    The $4.6 billion sale to Swedish private equity firm EQT
Infrastructure has led to a shareholder rebellion after Coast
Capital, the British firm's top investor with a 14% stake,
opposed the deal on concerns that it undervalued the assets.
    "Unless the deal terms are materially improved upon, along
with proposed use of proceeds, Coast Capital urges its fellow
investors to vote against this destructive proposal," the
activist investor said in a statement on Monday that laid down a
rebuttal to the arguments presented by FirstGroup.
    Glass Lewis also recommended that investors vote against the
deal at a meeting set for Thursday.
    "We tend to agree with Coast when it says any sale or carve
out of these U.S. businesses would be better done after a return
to normalcy in the U.S., in order to maximize value," it said in
a statement. 
    FTSE 250-listed FirstGroup did not immediately respond to a
request for comment. The company has said the deal followed "a
comprehensive and competitive process in order to seek the best
possible price."
    It plans to use the proceeds from the deal to pay down debt,
contribute to its UK pension schemes and return money to
shareholders.  urn:newsml:reuters.com:*:nL1N2MG0N5  
    The sale also faces opposition from Schroders, FirstGroup's
second-largest shareholder with a 12% stake. 
    However, it has the backing of the company's third-largest
shareholder, Columbia Threadneedle Investments.  urn:newsml:reuters.com:*:nL3N2N73P9
]
    

 (Reporting by Pushkala Aripaka and Shanima A in Bengaluru;
Editing by Aditya Soni)
 ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile:
+91 852 751 3793 ;))