Private equity giant Apollo backs away from South Western owner First Group

Lucy White
Greyhound Facing Capital Shortage
First Group also owns US coach company Greyhound (Source: Getty)

Less than a month after US private equity firm Apollo had its approach for the Greyhound bus owner First Group rejected, the unwanted bidder has said it will back away from the business.

In a regulatory announcement this morning Apollo said that it does not intend to make an offer for First Group, but gave no reasons for why it was backing down.

First Group, which owns the South Western rail business and is also one of the largest bus operators in the UK, said last month that it had rejected Apollo's advances which it deemed "opportunistic". Apollo had until tomorrow to make a firm offer.

Read more: South Western owner First Group rejects "opportunistic" bid from private equity giant Apollo

Apollo, which had $249bn (£176bn) in assets under management at the end of last year, has made a number of investments in the UK in the past.

It currently owns troubled jewellery retailer Claire’s, and helped property services company Countrywide list on the London Stock Exchange in 2013.

Canadian asset manager West Face Capital, an activist investor which owns a stake in First Group, has also been leaning on the business's board to make operational changes, telling them they are "unambitious".

West Face also believes that First Group is currently undervalued, since analysts do not "understand" the business and unduly focus on its UK divisions (as opposed to the US branches which constitute its main source of revenue).

Read more: South Western owner First Group under pressure from activist West Face in wake of rejected Apollo bid

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