US private equity mulls takeover bid for FirstGroup

Rail and bus operator FirstGroup is “currently evaluating” the latest in a series of unsolicited and conditional proposals from Miami-based private equity firm I Squared Capital Advisors in relation to a possible offer to purchase the group’s entire issued, and to be issued, share capital.

The approach under consideration was received on the evening of 25 May. It values FirstGroup at a maximum of £1.23bn.

That total comes via a cash component of 118p per share and a contingent of up to a further 45.6p per share based on the outcome of the earnout of the sale of the group’s former First Student and First Transit businesses in North America to EQT Infrastructure in 2021 and the net proceeds of the disposal of Greyhound in the United States to FlixMobility – now Flix – later the same year.

Previous approaches to FirstGroup by I Squared Capital were all rejected by the board “unanimously,” the group says in a statement. It has advised shareholders to take no action in response to the latest possible offer.

FirstGroup shares rose after the company disclosed the latest I Squared approach. Interest in FirstGroup follows German firm DWS Infrastructure’s bid to purchase Stagecoach, which looks set to progress after DWS secured the necessary shareholder approval on 20 May.

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