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FirstGroup PLC on Thursday said it has rejected a possible takeover offer from I Squared Capital Advisors (UK) LLP, saying the firm cash component undervalues the company and the contingent component doesn't give shareholders enough certainty.
Late last month, FirstGroup said it had received a series of offers from I Squared, the last being 118 pence per share in cash, plus 45.6p more contingent on the proceeds of FirstGroup's recent disposals of its First Transit and Greyhound businesses in the US.
FirstGroup shares were down 0.5% at 135.96p early Thursday in London. The company has a market capitalisation of just above £1 billion.
Having considered the proposal, FirstGroup on Thursday said the cash component undervalues its ‘continuing operations and future prospects’, while the contingent right doesn't provide shareholders with ‘sufficient certainty’.
As a result, the board has unanimously rejected the I Squared offer.
I Squared is an infrastructure investment manager focusing on energy, utilities, telecom and transport in the Americas, Europe and Asia. It has offices in London, Hong Kong, New Delhi, Singapore and Miami.
UK bus and train operators have been in play of late. Last month, Pan-European Infrastructure III SCSp, an infrastructure fund managed by DWS Infrastructure, declared its acquisition of Stagecoach Group PLC unconditional. Stagecoach earlier had backed out of an all-share merger with National Express Group PLC.
FirstGroup said it will release its results for the financial year that ended March 26 on June 14.
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