FirstGroup hits out at 'opportunistic' boardroom coup
Activist investor Coast Capital, which holds around 10 per cent of the bus and rail group's shares, wants to remove six of the 11 FirstGroup board members, including the chief executive and chairman, and replace them with its own representatives.
FirstGroup is to hold a specially convened shareholder meeting on 25 June to face down the demands of the shareholder, which it described as an "opportunistic, self-interested player that is only focused on short-term gains".
Bosses at the transport business said they recommend shareholders vote against the resolutions to replace them.
In an update to the market FirstGroup said: "Coast Capital has put forward plans that are inconsistent, demonstrate a lack of understanding of FirstGroup and the transport sector today and would leave the Group with higher debt.
"The directors strongly believe that the Coast Capital Resolutions are not in the best interests of the company, its shareholders as a whole or its wider stakeholders and recommend unanimously that FirstGroup shareholders vote against all of the Coast Capital resolutions."
New York-based hedge fund Coast has demanded a radical overhaul of the company's structures, including that it split its UK assets from its American assets and withdraw from Britain's "destructive" rail industry in a bid to return to profit.
Last week the transport business announced plans for a major shake-up which included the possible spin-off of its UK bus business and the sale of the Greyhound coach operation in the US, although bosses insisted the decision is nothing to with pressure from Coast.
Chad Tappendorf, a partner at Coast Capital has previously criticised the plans as “half-baked” and pointed to the board's lack of experience in the US market.