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FirstGroup raises shareholder returns to 500 million pounds from U.S. asset sale

FirstGroup raises proposed shareholder returns as U.S. bus deal closes
FirstGroup raises proposed shareholder returns as U.S. bus deal closes   -   Copyright  Thomson Reuters 2021
By Reuters

– British transport firm FirstGroup on Thursday increased its planned shareholder returns by 37% to 500 million pounds ($687.60 million) after closing the sale of its U.S. bus assets to private equity firm EQT Infrastructure.

FirstGroup had earlier promised to pay shareholders 365 million pounds on the 3.3 billion pound sale of FirstStudent and FirstTransit. While a majority of shareholders backed the deal in May, top two investors including Coast Capital had opposed the sale and the size of the returns.

“We are pleased that our continuing commitment and vigilance has resulted in this positive first step since this transaction was announced,” Coast founding partner James Rasteh said.

FirstGroup, which closed the sale on Wednesday evening, plans to use the rest of the sale proceeds to pay down debt and contribute to its UK pension schemes.

Shares in the company were up nearly 3% at 81.85 pence by 1718 GMT. They have gained about 10% so far this year, including session gains, after falling around 40% last year.

“Our mission is now to continue our work to realize greater value for us and all FirstGroup shareholders in the critical days ahead,” Rasteh said.

($1 = 0.7272 pounds)