Bus and train operator FirstGroup has formally rejected a £1.2bn takeover approach from US private equity firm I Squared, saying it “significantly undervalues” the firm and a conditional cash component did not provide shareholders with enough certainty.
The bid, which values FirstGroup at up to 163.6p a share, includes 45.6p that is conditional on the amount the company eventually receives from the previously agreed sale of its American businesses, including the Greyhound bus line.
Some of FirstGroup’s largest shareholders have reportedly told the company the offer would have to be unconditional for them to accept it, with cash offered in full, independent of future proceeds from asset disposals.
Schroders, with a near-18% stake, told the Sunday Times newspaper that the offer failed to reflect the group’s value as one of the few big UK bus and train operators.
I Squared has until June 23 to make a formal offer under UK takeover rules.
