A FRESH front in the battle between FirstGroup and its biggest shareholder erupted this morning when the activist bidding to overhaul the board claimed the chief executive and chairman told some shareholders that they are exploring the sale of its First Student business in the US to private equity investors.
Coast Capital, which has built up a near 10 per cent stake in the Aberdeen-based business, said the allegations “would run counter to the company’s publicly stated strategy and would appear to be material non-public information in nature” if proven to be true.
READ MORE: Bus and rail giant hits back at activist investor
“It would also amount to highly selective distribution of information among shareholders,” Coast added.
FirstGroup hit back this morning at Coast’s latest allegations, branding them “desperate and spurious” and a “further ploy to discredit and destabilise the board”.
A spokesman for the company added: “We have confirmed that these claims are baseless in fact and law, and told that to Coast.”
READ MORE: FirstGroup plan fails to impress rebel shareholder
FirstGroup chief executive Matthew Gregory unveiled a new strategy for the company on May 30 which detailed plans to exit its bus operation and scale back from rail franchising in the UK, while focusing on First Student and First Transit in the US in the long term.
The latest row came ahead of a general meeting today, at which shareholders in FirstGroup will vote on resolutions tabled by Coast calling for the removal of six of the eleven board members, to be replaced by seven of the activist’s nominees.
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