Business & Investment

Schroders joins investor rebellion over Reuters’ first group deal

© Reuters. File Photo: The bus will stop at the Greyhound Bus Station in El Paso, Texas, USA on March 5, 2021. REUTERS / Jose Luis Gonzalez / File Photo


By Yadarisa Shabong

(Reuters)-FirstGroup’s second largest shareholder, Schroder (LON :) will vote against the $ 4.6 billion sale to EQT (NYSE :), a private equity fund for its North American bus business, on Thursday, joining top investor Coast Capital to oppose the deal. Said.

The move comes after activist hedge fund Coast Capital has asked other First Group investors to vote against the proposed sale of the “Crown Jewel Asset” unless the offer improves.

“We are grateful that this was a very difficult time to carry out the sales process,” a Schroeder spokeswoman said in an email statement.

“But after careful consideration of the benefits of the proposed sale, we believe we underestimate these businesses and will vote against the current deal.”

FirstGroup said on Tuesday that it “followed a comprehensive and competitive process to pursue the highest possible price” for its assets.

The transaction is backed by Columbia Threadneedle Investments, the third largest shareholder with approximately 10% stake in FirstGroup.

According to Refinitiv Eikon data, Schroder Investment Management owns almost 12% of FirstGroup and Coast Capital owns almost 14%.

“We remain fully confident with Chairman David Martin to provide the leadership and vision needed for the ongoing business,” added a spokesperson for Schroeder.

James Laste, founding partner of Coast Capital, welcomed Schroder’s move to vote against the deal, but declined to comment on whether the fund was still confident in Martin.

FirstGroup will use the proceeds to repay debt, contribute to the UK pension plan and return to shareholders.

However, the Coast also criticized some of the earnings that shareholders are in a position to receive from the deal.

The First Group, which focuses on UK bus and train operations and the sale of Greyhound, said it would consider an additional distribution to continuing shareholders in addition to the £ 365m quota allocated.

The company will hold a general meeting on May 27 to vote on the proposed transaction.

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Schroders joins investor rebellion over Reuters’ first group deal Schroders joins investor rebellion over Reuters’ first group deal

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