First Group launches searing attack on ‘opportunistic’ activist investor
Transport giant First Group has hit back at an activist investor trying to oust six of its board members, describing it as an “opportunistic, self-interested player that is only focused on short-term gains”.
In a searing attack First Group has slammed US hedge fund Coast Capital for its “scatter-gun, inconsistent and unusual proposals” and warned its latest plans were not in the interests of shareholders.
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Coast, which holds a 10 per cent stake in First Group, has called for a general meeting to vote on the removal of six current directors and the appointment of seven of its own nominees.
The FTSE-250 firm has approved the meeting, which will take place on 25 June, but laid out a string of complaints against the activist investor.
First Group accused Coast of a “lack of understanding” of the company and pointed to its limited experience in running a similar business.
The firm criticised the choice of former transport Steve Norris as one of the board nominees, citing his lack of experience in running a company on a similar scale to First and his track record as chairman of Jarvis, which fell into administration in 2010.
First also hit out at Coast for proposing to reduce the diversity of the board. “Coast Capital seems more focused on rekindling the past than preparing for the future,” it said.
The attack comes after Coast demanded a radical overhaul of the company’s structure, including a split of its UK assets from its US assets and a withdrawal from Britain’s rail industry.
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The transport giant has suffered a turbulent year of trading since former boss Tim O’Toole stood down last May following an annual loss of £327m.
First Group last week announced plans to sell parts of its operations, including its Greyhound coach business. It has also vowed to focus on First Student and First Transit, its core US bus divisions and is seeks to ease investor concerns.
Coast Capital has been contacted for comment.