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FirstGroup sale of US businesses scrapes through as major shareholders object

FirstGroup PLC (LON:FGP) has seen a significant vote against its plans to sell US arms First Student and First Transit, though the deal still received enough support to be approved.

Around 39% of shareholders voted against the £3.3bn sale to Swedish group EQT, but as the deal only needed 50% to pass it was approved.

US investment group Coast Capital, which has a 13.6% stake, has led a high profile campaign to get the sale delayed and the businesses to be independently valued.

Last week it said if the sales were approved it would start legal action to recoup what it said were ‘undervaluation’ costs.

UK fund manager Schroders, another major shareholder, also opposed the deal, saying the sale of the businesses before they had time to recover fully from the effects of the pandemic made no sense.

FirstGroup chairman David Martin defended the disposal and terms in a statement made after the result was known, but acknowledged the sizeable vote against and said he would welcome “an open and constructive dialogue with all shareholders as we look to the future.”

“I and the whole Board take very seriously our responsibility to understand the different views and perspectives of investors, and recognise that a number of shareholders did not vote in favour of today’s resolution.

“Through this transaction, FirstGroup will return value to shareholders, address its long-standing liabilities and make a substantial contribution to its pension schemes.”

FirstGroup shares edged higher to 85.6p.

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