The huge multinational corporation which owns the biggest bus company in Bristol has agreed to sell its North American operations – which means the First Bus side of the business will not be sold.
FirstGroup, which owns both GWR train company and First Bus West of England, said it had already received “significant interest” after starting a formal sale process for its North American bus contract businesses.
FirstGroup has come under fierce pressure from an activist investor in recent days, and has confirmed it is looking at offloading the First Student and First Transit businesses.
David Martin, First Group’s chairman, said: “We firmly believe that a sale of these assets is the best way to unlock material value for all FirstGroup shareholders, having completed a detailed review and analysis with advisers appointed by the board to explore all options.”
On Monday (March 9), activist investor Coast Capital accused FirstGroup bosses of failing to properly engage on its plans to sell the company’s North American bus and coach division.
The fund, which owns a 10 per cent stake in the business, said “unless the board announces a separation”, Coast will demand a special shareholder meeting for investors “to vote on an immediate de-merger of the North American operations”.
(Image: David Betts Photography)
There had been concerns that Bristol’s buses faced an uncertain future when First Group announced in May lat year that it would be ‘pursuing strategic options, through a sale or other means’ to offload the bus part of its business.
In December FirstGroup said a sale of its US businesses was under way, but it looks like it currently has no plans to pursue a separation or sale of First Bus.
James Freeman, managing director at First West of England said: “First Bus will continue to play a key role, as an integral part of leading transport company FirstGroup, in supporting and stimulating economic growth across the UK whilst helping to achieve net zero emissions.
“Our leading position in low emission vehicles and strong relationships with local and regional government gives us a robust platform from which to capitalise on the growing political recognition of the importance of buses to the UK’s future.
“For instance, First West of England has invested in 77 new bio-methane powered gas buses, which will reduce greenhouse gas emissions by 85 per cent.
“The launch of a new major gas fuelling station at our Lawrence Hill Depot means we can continue to roll out these cleaner, greener vehicles to help improve air quality and tackle the climate emergency.”
First Group also runs the Greyhound bus business in the US, but said the arm has seen trading slip 3.5% in the year-to-date amid a “difficult trading environment”.
Mr Martin added: “Despite near-term uncertainty in the wider markets, there remains a fundamental need for people to travel safely and conveniently for business, education, social or recreational reasons which is essential to sustainable and thriving economies and communities.
“We are resolutely focused on delivering our plans – including the portfolio rationalisation strategy – in the best interests of all shareholders.”
The company added that its UK rail business has seen trading improve following the introduction of new trades and timetable changes for its Great Western Railway line.