Hedge Fund Sandell wants FirstGroup to sell U.S. businesses - FT
Dec 11 (Reuters) - British bus and rail operator FirstGroup Plc has received a letter from one of its biggest shareholders, urging the company to sell its U.S. businesses in order to pay down debt, the Financial Times reported.
Hedge fund Sandell Asset Management, which owns about 3 percent in FirstGroup, has asked the company to consider the sale of Greyhound, the trans-American bus service, and its school bus division, the business daily said.
FirstGroup acquired both the businesses when it bought U.S. bus business Laidlaw in 2007. It has since struggled to reduce its borrowings, much of which were incurred by the 1.9 billion pound Laidlaw deal.
Sandell Asset Management founder, Tom Sandell, wrote in a letter to the company that his proposals would help lift FirstGroup's shares to 199 pence from the 116 pence level they closed at on Tuesday, the newspaper said. ()
FirstGroup shares have fallen 32 percent so far this year, largely due to a heavily discounted rights issue in May to help pay down its debt.
FirstGroup and Sandell could not be reached for comment by Reuters outside of regular business hours.