Property baron Robert Tchenguiz urges FirstGroup to sell U.S. transit services

Credit: REUTERS/Mike Blake

Adds FirstGroup response in paragraphs 3 and 4, analyst comment in paragraph 7 and background

Nov 18 (Reuters) - FirstGroup Plc's FGP.L largest individual shareholder on Monday urged the company to sell all of its operations in the United States, and asked for more clarity about strategic plans as the British bus and train operator works to sell its U.S. intercity service Greyhound.

Iranian-born property baron Robert Tchenguiz, who holds a 4.7% economic interest in FirstGroup, saidhe would seek a shareholder meeting as soon as "practically" possible and urged FirstGroup Chair David Martinto conduct a strategic review.

London-listed FirstGroup in response said its First Student school bus service and First Transit service in North America were "valuable assets and well positioned ... with profitable growth."

"The board has been consistent and clear that the objective is to realise value and therefore were a credible and deliverable offer to be received for these or any other business in the portfolio then, of course, the board would give that serious consideration," it said.

First Student and First Transit accounted for 60% of the company's operating profit in fiscal 2019.

Aberdeen-based FirstGroup said on Thursday it was in talks with bidders for Greyhound and reported a bigger loss for the first half amid a drop in demand in the United States, especially at the southern border.

Following the results, Liberum analyst Gerald Khoo said he expected scepticism to prevail as FirstGroup's management continued to talk about progress in the 'portfolio rationalisation' process without any actual disposals.

FirstGroup had put up Greyhound for sale earlier this year also, partly due to growing competition from low-cost airlines.

Tchenguiz and his brother Vincent in 2014 had settled with Britain's Serious Fraud Office after suing it over a botched investigation in a case linked to the 2008 collapse of Iceland's Kaupthing bank.

($1 = 0.7723 pounds)

(Reporting by Pushkala Aripaka and Yadarisa Shabong in Bengaluru; Editing by Maju Samuel)

((Pushkala.A@thomsonreuters.com; Twitter: @pushkala_a; within UK: +44 20 7542 1810, outside UK: +91 80 6749 6633;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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