RANSPORT giant First Group offered its private equity suitors I Squared Capital a one-way ticket out of town today, flatly rejecting a £1.2 billion takeover offer.
That deal was for 118p in cash with a further 45.6p possible from the earnout on sales of the Greyhound bus arm and First Transit.
First Group said the offer “significantly undervalues” the business in a statement it noted had been made “without the consent of I Squared”.
The contingent right to the extra cash “does not provide shareholders with sufficient certainty”, added First Group.
I Squared is a US private equity fund based in Miami with assets of $13 billion and a focus on big infrastructure businesses such as energy and transport.
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First Group runs GWR and South Western trains. It used to run the yellow school buses in the US, but sold that arm and is now a UK business only.
Its shares were today at 136p, seemingly well below the value of the putative offer, suggesting City scepticism that I Squared has got much chance of success at the moment.
First Group said: “The board has unanimously rejected the proposal.”
I Squared did not immediately respond.
