In a statement issued two hours after the stock market closed, FirstGroup said it had received a “preliminary and highly conditional indicative proposal” from a fund managed by New York-headquartered Apollo Management.
“The board of FirstGroup has considered the proposal in detail and believes that it fundamentally undervalues the company and is opportunistic in nature,” it said.
“Accordingly, the board of FirstGroup has unanimously rejected the proposal.”
The statement added: “There can be no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made. A further announcement will be made in due course if and when appropriate.”
FirstGroup, which employs 100,000 staff and has annual revenues of £5.7 billion, issued the statement after shares in the company rose by more than 7 per cent during trading yesterday.
Apollo Global Management specialises in buyout transactions, corporate restructurings and industry consolidations. Its Apollo Management IX LP buyout fund which has made the approach to FirstGroup raised a warchest of $24.6bn (£17.4bn) last year
As well as bus and train operations in the UK, FirstGroup – led by American chief executive Tim O’Toole – owns the famous Greyhound coach services in the US and Canada.