FirstGroup Plc said it would sell the Greyhound bus division and separate its First Bus operations, bowing to shareholder pressure to break up the UK transport company.
The decision to part with its bus businesses reverses a November vow by newly seated Chief Executive Officer Matthew Gregory to keep the company together. The firm will now be focused on two North American businesses — First Transit, which manages public buses, and First Student, which operates school buses.
James Rasteh, the founder of Coast Capital, First Group’s largest shareholder with a 9.8 percent stake, has been agitating for change. Previous CEO Tim O’Toole quit last May after delivering an annual loss and overseeing an almost 75 percent decline in the stock price.
FirstGroup last year rejected takeover bids from Apollo Global Management LLC, saying they undervalued the business. The company has also attracted interest from buyout firms including CVC Capital Partners, people familiar with the matter said last year.
The decision comes as First Group reported an annual adjusted pretax profit of 226.3 million pounds ($286 million). The company said it won’t pay a dividend for the year that ended in March, and will operate its rail franchises, including South Western Railway and Great Western Railway, “in accordance with their terms.”
First Group shares have advanced 32 percent this year as pressure mounted from Coast Capital. The shares fell 29 percent in 2018.
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