Rail and bus operator FirstGroup has rejected a proposed takeover offer from global infrastructure investment fund I Squared Capital Advisors.
FirstGroup, which is the UK’s largest rail operator, has received a “series of unsolicited, conditional proposals” from I Squared Capital offering a price of £1.18 per share to shareholders, plus a possible further 45.6p per share based on the sale of FirstGroup’s First Transit and Greyhound subsidiaries.
The company’s board said in a statement that it had unanimously rejected the takeover proposal from I Squared Capital.
“The board, having carefully evaluated the proposal together with its advisers, concluded that the cash component of £1.18 per FirstGroup share significantly undervalues FirstGroup's continuing operations and its future prospects,” said FirstGroup in an official response to the takeover approach.
FirstGroup operates four UK train networks: Avanti West Coast, Great Western Railway, South Western Railway and TransPennine Express. The company is also the second largest bus operator in the UK.
I Squared Capital, which has offices in London, Hong Kong, Delhi, Singapore and Miami, specialises in infrastructure investments in the transport, energy, utilities and telecoms sectors.
If the takeover bid for FirstGroup is successful it will become another acquisition of a major UK-based ground transport operator this year after Stagecoach was purchased by German investment fund DWS Infrastructure last month.