First Group hoists $4 billion For Sale sign over North American bus divisions
FirstGroup today put its huge North American contract buses operations up for sale for around $4 billion after more than a year of pressure from an activist investor.
The move will see the sale of two businesses. First Student is the famous yellow buses group that takes US and Canadian students to schools and colleges every day. First Transit runs city bus networks and private contracts shuttling staff to and from factories, oil facilities and other workplaces.
It does not include First’s famous Greyhound line that has been a staple of American life since 1914. A far smaller, troubled, business, this has been up for sale in a separate process.
The sale comes after pressure from activist Coast which has demanded, and received, changes in the make-up of the board. On Monday, Coast upped the pressure, demanding a sale soon.
Chief executive Matthew Gregory denied that statement was behind today’s move. He said: “We have been working on this for months. It is a complex process which has required a huge amount of preparation.”
Rothschild, Goldman Sachs and JPMorgan will run the sale process.
Gregory said there had been “a lot of interest” from potential bidders for the business since he said in December it was under review. Revenues at First Student since September have been up 4% and First Transit up 5.7%, but Greyhound fell 9.2%.
