FirstGroup shareholders have voted to approve the sale of the First Student and First Transit businesses in North America to EQT Infrastructure.
61.3% of votes cast were in favour, with 38.7% against and a small number withheld. News of the proposed sale was first announced on 23 April. The two businesses are to be sold for £3.3bn and FirstGroup expects that completion will be achieved in the second half of 2021.
After shareholders approved the transaction, FirstGroup Chairman David Martin quickly underlined how the proceeds will leave it “in prime position to deliver on its goals with a well-capitalised balance sheet and an operating model that will support an attractive dividend for shareholders.” First Bus has already committed to an ambitious target of running an entirely zero-emission bus fleet in the UK by 2035.
Since news of the deal broke in April, private equity firm and FirstGroup’s largest shareholder Coast Capital has been vocal in its opposition to the sale. It has claimed that the process had been “rushed” and was “unexhaustive”, and that the return realised would be below market value.
Those comments were strongly rebutted by FirstGroup. In return, it accused Coast Capital of issuing statements with “numerous inaccuracies.” FirstGroup also reiterated its belief that £3.3bn “represents a full strategic value” of First Student and First Transit. Mr Martin noted at that time that “shareholders have waited long enough” for the sale, although after the vote to approve the transaction he added that he and the Board accept that a significant minority of them voted against it.
The proceeds will additionally make what FirstGroup describes as “a substantial contribution” to the group’s pension schemes. At the time that it announced the proposed sale of First Student and First Transit to EQT, the group added that it is pursuing “all exit options” for its remaining Greyhound business in North America.