Scottish bus and rail giant leaves door open for higher takeover bid

·2-min read
FirstGroup previously rejected approach from I Squared
FirstGroup previously rejected approach from I Squared

By Scott Wright

FIRSTGROUP has left the door open for its spurned takeover suitor to return with a higher bid for the transport giant.

The board of the Aberdeen-based bus and rail company had last month “unanimously rejected” an approach from private equity player I Square Capital.

The approach, which was the latest in a series of “unsolicited, conditional of proposals” from I Squared, had valued FirstGroup at up to £1.23 billion. The company said that approach “significantly undervalued FirstGroup’s continuing operations and its future prospects, and was not in a structure that provided sufficient certainty to shareholders.”

But last night the Scottish company, which owns First Bus and runs the Avanti West Coast rail franchise with Trenitalia, announced that it had moved to give I Squared more time to make a formal offer.

I Squared, which teamed up with TDR Capital to acquire Aggreko last year, was initially given until 5pm last night (June 23) to either announce its intention to make an offer for the company, or state its intention to walk away.

FirstGroup told the City last night that it had successfully requested an extension to the put up for shut up (PUSU) deadline to allow more time for negotiations with I Squared.

The company said in a statement: “In order to allow discussions with I Squared to continue, the Board of FirstGroup has requested that the Panel on Takeovers and Mergers (the “Panel”) extend the PUSU Deadline in accordance with Rule 2.6(c) of the Code.

“In light of this request, an extension has been granted by the Panel and in accordance with Rule 2.6(a) of the Code, I Squared is required, by not later than 5.00 p.m. on 21 July 2022, either to announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended further with the consent of the Panel, at the Company’s request, in accordance with Rule 2.6(c) of the Code.

“This announcement has been made without the consent of I Squared.”

Shares in FirstGroup closed down 2.52p at136.98p.

Fellow Scottish transport giant Stagecoach has agreed to be taken over by German infrastructure investor DWS for £595 million.

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