Extension for talks on FirstGroup takeover

The Stock Market has agreed a four-week extension to the deadline for talks between FirstGroup and US-based I Squared Capital Advisors, which is proposing a takeover of the group.

The private equity firm now has until 1700 on August 18 to announce if it will make a firm offer to buy all the company’s shares. It is the second deadline extension, after I Squared’s initial unsolicited approach was made public on May 26.

If the takeover goes ahead, FirstGroup would be delisted from the Stock Exchange, with its shareholders ‘bought out’.

In June, the UK rail and bus operator rejected a £1.2 billion takeover offer by I Squared. At the time, FirstGroup said the offer, worth 118p per share in cash terms, “significantly undervalues” the company.

Prior to the offer, FirstGroup shares were trading at around 108p-110p. After a jump when news of a possible takeover broke, by July 28 they had settled at 131p.

FirstGroup has attracted bidder interest after it exited North America following pressure from activist shareholders, leaving it focused on the UK rail and bus market.

Go-Ahead and Stagecoach are also in the process of being taken over, by Australian and German firms respectively, leaving National Express as the only large transport company still listed on the Stock Exchange.