Delayed arrival

30 May 2019 By Karen Kwok Follow @KarenKKwok

Under pressure from an activist, Britain’s FirstGroup is selling the iconic U.S. coach group and spinning off its UK bus unit. Simplifying the $1.8 bln group should unlock value. But uncertainty over timing and liabilities means investors are miles away from their destination.

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Britain’s FirstGroup on May 30 announced plans to separate its UK bus business and sell its Greyhound subsidiary as part of a plan to focus on student and commuter buses in the United States.

“Greyhound has limited synergies with our other, predominantly contract-based, North American businesses and we believe that value for shareholders can best be delivered by seeking new owners," FirstGroup said in a statement.

FirstGroup, which also operates UK rail franchises, reported an operating profit of 9.8 million pounds for the year to March 2019, compared with a 196 million pound loss in the previous year. Revenue rose 11% to 7.1 billion pounds.

Adjusted operating profit, which excludes insurance charges, restructuring costs and other expenses, was 333 million pounds, up 5%.

Coast Capital, FirstGroup’s second-largest shareholder with a 9.8% stake, is seeking to replace six of the company’s 11 directors at its upcoming annual meeting.

FirstGroup shares were up 4.4% at 116 pence by 1400 GMT on May 30.

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