FIRSTGROUP came under fresh pressure to sell its US businesses yesterday, as activist hedge fund Sandell set out details of its preferred shake-up plan.
Sandell produced a “white paper” urging First to dispose of its American student transit unit, with First’s own investors highlighted as potential new owners, before getting rid of coach operator Greyhound.
The hedge fund claims the sale will allow management to focus on the UK business and cut debt, delivering value of between 156p and 191p per share.
“We believe shareholders strongly support our ideas, and have been encouraged by their reaction since our engagement with the company became public,” said chief executive Tom Sandell.
“We believe the company’s rejection was premature, without fully appreciating the rationale behind the proposals,” he added in a letter to First’s management.
Sandell built a stake of 3.1 per cent in First in November, before making its plan public last month when talks with executives behind the scenes failed to make progress.
The transport group has said it thinks the break-up plan is not compelling.
Sandell’s efforts come at a busy time for activist investors worldwide. Research commissioned by law firm Linklaters found that activists made 323 interventions in major companies in the first nine months of 2013, up from 172 in the whole of 2010.
Much of this increase was felt by US boardrooms, though interventions also rose 62 per cent in Europe in the period, Linklaters said.