Firstgroup hits out at investor’s bid for boardroom coup

● Bosses label Coast Capital’s move to replace half of board as ‘irresponsible’

First Group, the Aberdeenhead quartered transport giant, has hit back against an attack mounted by its largest single shareholder to topple a dozen of its board members.

Activist investor Coast Capital, which holds 9.7 per cent of the bus and rail group’s shares, wants to remove six of the 11 Firstgroup board members, including the chief executive and chairman, and replace them with its own representatives.

First Group said Coast’ s demands to split UK and US assets and quit the rail industry were“inconsistent” and “irresponsible”.

Nevertheless it consented to hold a specially convened shareholder meeting on 25 June to face down the demands of the sharehold - er, which it described as an “opportunistic, self-interested player that is only focused on short-term gains”.

Chief executive Matthew Gregory said :“Coast’ s plans are rooted in the past. The people they are proposing [to put on the board] were with the company 20 years ago – before the technology we have now.

“A lot of what they are saying is just plain wrong, unfortunately.

“Their aim is to seize control of a Uk-listed plc without paying a premium.”

Boss es at the transport business said they recommend shareholders vote against the resolutions to replace them.

In an update to the market, Firstgroup said: “Coast Capital has put forward plans that are inconsistent, demonstrate a lack of understanding of Firstgroup and the transport sector today and would leave the group with higher debt.

“The directors strongly believe that the Coast Capital Resolutions are not in the best interests of the company, its shareholders as a whole or its wider stakeholders.”

It added that calls to leave its UK rail franchises – Great Western Railway, South Western Railway (SWR) and Transpennine Express – pay “no regard to the contractual nature of these arrangements”.

New York-based hedge fund Coast has demanded a radical over haul of the comp any’s structures, including that it split its UK assets from its American assets and withdraw from Britain’ s“destructive” rail industry in a bid to return to profit.

Last week the transport company announced plans for a major shake -up which included the possible spin-off of its UK bus business and the sale of the Greyhound coach operation in the US, although bosses insisted the decision is nothing to with pressure from Coast.

First Group said it would turn its attention to First Student, the biggest provider of school transportation in the US with a fleet of 42,000 buses, and North American bus company First Transit, claiming these ventures “have the greatest potential to generate sustainable value”.

Coast Capital partner Chad Tapp endorf has previously criticised the plans as “halfbaked” and cited the board’s lack of experience in the US.