FirstGroup asks shareholders to back sale of units as top investor opposes By Reuters

(Reuters) – Britain’s FirstGroup recommended that its shareholders back the $4.6 billion sale of its two North American bus businesses to Swedish private equity firm EQT Infrastructure, after the company’s top investor urged against it.

Coast Capital, which holds nearly 14% of the transport operator, late on Monday urged fellow shareholders to vote against the proposed disposal of the “crown jewel assets”, unless the terms of the proposal were “rapidly and substantively improved”.

FirstGroup said, “The sale followed a comprehensive and competitive process in order to seek the best possible price for First Student and First Transit, which was well-publicised for more than a year.”

The company, in its disposal announcement last month, said it would use the sale proceeds to pay down debt, including the UK government’s coronavirus aid, contribute to its UK pension schemes and return about 365 million pounds ($518.48 million) to shareholders.

The fund had also expressed dissatisfaction over the portion of proceeds that shareholders stand to receive from the deal.

Shares of the FTSE 250 company, which will hold a general meeting on May 27 to vote on the proposed divestment, were up 1.5% by 1141 GMT.

($1 = 0.7040 pounds)