Aberdeen-based transport giant FirstGroup is facing renewed calls from activist investor Tom Sandell to sell off its American assets.
The Swedish billionaire, who owns a 3.1% stake in the transport group via New York-based Sandell Asset Management, is reportedly travelling to the UK to encourage investors to back his break-up plans. Representatives from Mr Sandell’s US hedge fund are also believed to be giving a presentation on the proposals at a Bank of America Merrill Lynch conference later this week.
In December, the transport firm rejected Mr Sandell’s proposals to sell off its intercity bus service Greyhound and divest the rest of its North American arm, which includes yellow school bus services for around 6million pupils.
The Swedish investor believes selling off its US portfolio will strengthen FirstGroup’s balance sheet and help prepare the company for the upcoming round of UK rail franchise bids, as well as enable investment in its UK bus arm.
A FirstGroup spokesman last night said the firm was committed to existing plans, announced in May 2013, to pump £1.6billion into a four-year investment programme to tackle debts worth nearly £2billion.
On January 1 this year, the boss of insurance giant Aviva – John McFarlane – took up the post of chairman at the group. He replaced Martin Gilbert who announced plans to step down in May last year after the group tapped investors for £615million and cancelled its shareholder dividend.
The transport firm, which is now Scotland’s largest company employing more than 120,000 people across the world, is set to unveil its third quarter results and host a capital markets day on January 23.
The firm is now the second-largest bus operator in the UK with 6,500 vehicles, and the largest train operator in Britain via its ScotRail and Great Western franchises.