(Reuters) - Britain’s FirstGroup plc on Tuesday rejected top shareholder Coast Capital’s proposals to appoint a new chief executive, overhaul its board and exit the rail business, saying they were not in the company’s “best interests”.
Bowing to investor pressure, FirstGroup last week put its iconic North American bus line Greyhound for sale and said it would spin off its UK First Bus business.
But the company’s management stood its ground on the raft of changes proposed by Coast Capital, which holds a stake of about 10 percent in FirstGroup.
“The Board believes that Coast Capital is an opportunistic, self-interested player that is only focussed on short-term gains,” the company said in a statement.
FirstGroup added that it had “constructively” engaged with Coast Capital for over a year.
The company, which replaced its chief executive last year and has not paid a dividend since 2013, has rejected two approaches from private equity firms and is also a target of Canadian activist investor West Face Capital.
Coast Capital also proposed FirstGroup reduce its pension obligations and exit its rail businesses “in full”.
FirstGroup, which has flagged “reduced expectations” for its two most recently awarded rail franchises, said on Tuesday it will operate its rail franchises under their existing terms.
The company has scheduled a shareholder meeting on June 25 to discuss Coast Capital’s proposal.
Coast Capital did not immediately respond to a request for comment.
Reporting by Justin George Varghese and Karina Dsouza in Bengaluru; Editing by Saumyadeb Chakrabarty