By Scott Wright
MATTHEW Gregory is unlikely to reflect on 2019 as a memorable year when he sits down with a glass of mulled wine at the company Christmas party.
The FirstGroup chief executive may have hoped he had heard the last of activist investors when he saw off a boardroom coup instigated by Coast Capital back in June.
But the unrest has surfaced again, and this time high-profile investor Robert Tchenguiz is in on the act.
Tchenguiz claimed yesterday there is confusion surrounding the company’s strategy, suggesting there is a difference in opinion between Mr Gregory and chairman David Martin over how to streamline the business.
The underlying theme, however, is familiar. Investors such as Tchenguiz and Coast are hellbent on the company pulling out of the US. It is not sufficient for them to sell Greyhound, the inter-city coach business in North America above which the for sale sign has been hoisted. They want an exit, too, from both First Student and First Transit, two sizeable and profitable operations, declaring that the separation of all US businesses is needed to maximise shareholder value.
FirstGroup denied that there is any inconsistency at the top. It said it was focused on the strategy set out by Mr Gregory in May, which involves selling Greyhound and could see it spin out First Bus in the UK. But it did say that it would consider any “credible” offer that may come in for any part of its portfolio, including First Student and First Transit.
It is worth questioning, though, whether the sale of First Student and First Transit should be pursued. While some investors may calculate it might bring a short-term boost to the share price, those in it for the longer term may believe the company would benefit by retaining exposure to the US, where the economic outlook is a good deal rosier than here in the UK.
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