US investor tries to buy FirstGroup for up to £1.2bn
FirstGroup said it was considering a new takeover bid from a US-based serial contender.
The company said it was the latest in a series of “unsolicited” and “conditional” proposals from Miami-headquartered I Squared Capital Advisors.
So far they have all been rejected.
The latest attempt hit the FirstGroup administrators office yesterday. It offers 118p cash upfront for the company and an additional 45.6p subject to certain conditions.
The board, together with its advisers, is currently assessing the latest approach, received last night, which provides for a cash component of 118p per share and a contingent right of up to a further 45.6p per share.Spokesperson for the first group
The initial part of the deal is worth around £885m to shareholders, the second could net them a further £340m. The company said it was “evaluating” the latest proposal.
FirstGroup shares soared after the news, rising 9.3% to 130.5p.
“FirstGroup’s board of directors notes the recent movement in the share price,” the transportation company told shareholders on Thursday.
“The company has received a series of unsolicited conditional proposals from I Squared Capital Advisors.”
“The board, together with its advisers, is currently assessing the latest approach, received last night, which provides for a cash component of 118 pence per share and a contingent right of up to a further 45.6 pence per share.”
I Squared had told the board that the additional 45.6p part of the deal was based on how much the company makes from sales of two companies.
When the company sold US transport company First Transit in 2021, the contract included an earn-out clause, meaning it could collect up to £170million if the business performs well enough under the new owner.
Depending on the amount of that money and the proceeds of a separate sale, the price I Square will pay could rise to as much as £340m.
The additional component is “based on the earnings from First Transit’s earn-out and the net proceeds realized on assets and liabilities inherited from Greyhound,” FirstGroup said.
“The previous approaches were all unanimously rejected by the board.”
The company promised to keep shareholders informed.