FirstGroup investor demands board shake-up

One of FirstGroup's biggest shareholders has demanded the company call a meeting to remove more than half the board including its chief executive and chairman.

FirstGroup said it had received a requisition notice from Hermes-Golden, managed by Coast Capital Management, calling for the general meeting. Coast Capital, a New York hedge fund, has been agitating for change at the transport company since early 2018.

Coast Capital also notified FirstGroup that it had increased its stake in the company to 9.77% from 8.79%. FirstGroup said it would write to shareholders about the requisition notice "in due course".

The hedge fund has called for FirstGroup, which operates buses and trains in the UK and North America, including Greyhound in the US, to break itself up. It has accused the company of many years of underperformance.

The FTSE 250 company said: "FirstGroup considers the views of all shareholders and, accordingly, will continue to engage with Coast Capital having attempted to do so constructively for more than a year. The company’s engagement with Coast Capital has included detailed responses to several proposals and has involved a number of meetings with the chairman and with senior management."

FirstGroup said in July it was looking at all avenues to add to shareholder value but Coast Capital has lost patience and wants the removal of recently installed CEO Matthew Gregory and Chairman Wolfhart Hauser along with five non-executives. It has proposed bringing in former Conservative minister Steven Norris as chairman.

Coast Capital partner James Rasteh told the Sunday Times the directors were "all shades of super destructive to extraordinarily under-qualified". In its response, FirstGroup said it had the right team and that it had added new board members, including hiring Ryan Mangold from Taylor Wimpey as its new finance director on 2 May.

FirstGroup shares rose 0.3% to 116.74p at 0803 BST.