Pressure grows on FirstGroup as activist arrives in UK

The Swedish billionaire is believed to be flying into the City to meet investors, while his hedge fund, Sandell Asset Management, is also understood to be giving a presentation on its proposals at a Bank of America Merrill Lynch conference this week.

However, a FirstGroup senior board member questioned whether Sandell’s 3.1pc stake gives it the right to propose the plans or call a shareholder meeting.

The board member said FirstGroup had analysed Sandell’s plan and had considered all of its options last year at the time of the group’s deeply discounted £615m rights issue.

“We came out very clearly, 'here’s our plan for the future, here are our targets’ so it would be very peculiar if a few weeks later someone pops up from the outside and says 'here do this’,” the board member said.

The shareholder also has significant concerns about whether Sandell’s hugely complex plans could be achieved against the backdrop of US concerns about the Federal Reserve tapering quantitative easing.

FirstGroup will unveil its third quarter results and host a capital markets day on Jan 23. Sandell representatives are expected to attend.

“We believe there is strong shareholder support for our ideas and this belief has been reinforced since our engagement with management became public,” a Sandell spokesman said.

A FirstGroup spokesman said the company stood by last month’s rebuttal to Sandell, when it claimed the investor’s proposal contained “a number of structural flaws and inaccuracies”.

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