FirstGroup PLC is facing a call for its chief executive Matthew Gregory to resign as Coast Capital continues to voice its unhappiness over the recent sale of two US businesses – First Transit and First Student.
The activist investor also wants non-executives Warwick Brady and Julia Steyn to stand down.
Shareholder Coast was a fierce critic of the sale of the US businesses to Scandinavian group EQT, which it says was too cheap and at the peak of Covid-19 disruption on the businesses.
Gregory should depart for suggesting that the businesses UK operations be sold, Coast added.
The UK group also refused to talk about alternative proposals that it calculated would generate more for shareholders, Coast founding partner James Rasteh told Reuters.
The proposals included a possible sale-and-leaseback transaction and deals involving a special acquisition vehicle, Rasteh said.
“Given the board’s decision to pursue a different path, Coast Capital and fellow shareholders request that (FirstGroup CEO Matthew) Gregory resign,” Coast said in a statement.
In response, a spokesman for FirstGroup said:: “The successful sale of First Student and First Transit achieved a full strategic value that looks beyond the pandemic.
“The transaction, now approved by a majority of shareholders, enables the group to return £500m of value to all shareholders, address its long-standing liabilities and make a substantial contribution to the pension scheme deficits.”
Around 39% of shareholders voted against the £3.3bn sales of the US businesses to EQT, but as the deal only needed 50% to pass it was approved.
Following the disposals, FirstGroup said it would regroup around its UK bus and rail operations.
Shares rose 1.5% to 83.5p.