FIRSTGROUP is facing an attempt to remove more than half of its board, including its chief executive and chairman, by its biggest shareholder, which has slammed the performance of the bus and rail giant.

Activist investor Coast Capital, which has built up its stake in FirstGroup to 9.77 per cent, has accused the current leadership of presiding over a “track record of value destruction and under-performance” at the Aberdeen headquartered firm.

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And it raised the prospect of selling off parts of the group in order to “create value” for shareholders, employees and pensioners. FirstGroup operates Greyhound, First Student and First Transit in the US, as well as First Bus and First Rail, which runs three major rail franchises in the UK, in its home market.

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Declaring that the value of FirstGroup has plunged by 75% since 2010, the activist is demanding an extraordinary general meeting at which shareholders would be asked to vote to remove six of the current eleven directors. These include chief executive Matthew Gregory, who succeeded Tim O’Toole in November, and chairman Wolfhart Hauser.

Coast is calling for the removal of non-executive directors Steve Gunning, Martha Poulter, Imelda Walsh and James Winestock, while proposing the appointment of seven its own nominees, whom it says are independent and have “relevant transport and turnaround credentials”.

Among its nominees are former UK transport minister Steve Norris and David Martin, a one-time chief executive of bus giant Arriva.

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Asked if there was any particular aspect of FirstGroup’s performance that Coast was unhappy with, partner Chad Tappendorf claimed one-third of First Bus routes in the UK are unprofitable, while two of its three rail franchises are running at a loss. He added that First Transit and First Student underperform rival National Express, the second biggest player in these markets behind FirstGroup, by “two or three percentage points”.

Mr Tappendorf said: “There is meaningful room for improvement across the entire portfolio. We are not trying to step on anybody’s toes. What we are trying to do is put in place the very best board members to lead this company to its full and fair valuation, which is in the best interests of not just shareholders, but all stakeholders.”

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Asked whether Coast, if successful, would look to sell assets, Mr Tappendorf said: “Seventy per cent of its operating income is through the US businesses. There are ways to meaningfully improve the business... but at the end of the day this is a company that operates five different businesses across seven times zones, all centrally located in the UK. That is a very difficult position to be in.”

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Coast said it has a long track record of making suggestions to improve the firm’s performance, which have been ignored. Chief investment officer and partner James Rasteh said it has a long-term commitment to the company, noting it had defended it against a takeover approach from Apollo, the US private equity firm, last year. “If we were short-term opportunists we would have tried to get maximum price and just get on,” he said.

FirstGroup said it has the right team in place and has responded to suggestions from the investor. It said: “The board of FirstGroup are focused on delivering shareholder value and are confident that the company has the right team with the right experience and plans in place to do so. The board regularly reviews its composition to ensure it maintains an appropriate balance of skills and expertise, and new board members have been added, as recently as earlier this month.

The company added: “FirstGroup considers the views of all shareholders and, accordingly, will continue to engage with Coast Capital having attempted to do so constructively for more than a year.

Shares closed down 1.2p, or 1.03%, at 115.2p.