UK’s FirstGroup faces more pressure over EQT deal By Reuters

(Reuters) -FirstGroup’s biggest investor on Monday again asked shareholders of the London-listed transport operator to vote against the company’s sale of two North American bus businesses, while proxy advisory firm Glass Lewis joined the opposition.

The $4.6 billion sale to Swedish private equity firm EQT Infrastructure has led to a shareholder rebellion after Coast Capital, the British firm’s top investor with a 14% stake, opposed the deal on concerns that it undervalued the assets.

“Unless the deal terms are materially improved upon, along with proposed use of proceeds, Coast Capital urges its fellow investors to vote against this destructive proposal,” the activist investor said in a statement on Monday that laid down a rebuttal to the arguments presented by FirstGroup.

Glass Lewis also recommended that investors vote against the deal at a meeting set for Thursday.

“We tend to agree with Coast when it says any sale or carve out of these U.S. businesses would be better done after a return to normalcy in the U.S., in order to maximize value,” it said in a statement.

FTSE 250-listed FirstGroup did not immediately respond to a request for comment. The company has said the deal followed “a comprehensive and competitive process in order to seek the best possible price.”

It plans to use the proceeds from the deal to pay down debt, contribute to its UK pension schemes and return money to shareholders.

The sale also faces opposition from Schroders (LON:SDR), FirstGroup’s second-largest shareholder with a 12% stake.

However, it has the backing of the company’s third-largest shareholder, Columbia Threadneedle Investments.