FIRSTGROUP, the Aberdeen-based bus and rail giant, has rebuffed a takeover approach from a major US investment firm.
The transport giant, which runs bus and rail services in the UK and North America, confirmed to the stock market that it had received a "preliminary and highly conditional conditional indicative" proposal from Apollo Global Management relating to a possible cash offer for the company.
The statement came after the FirstGroup share price surged more than seven per cent in trading on the London market today. The stock closed up 7p at 101.8p.
In a statement released after the market closed, the company said: “The board of FirstGroup has considered the proposal in detail and believes that it fundamentally undervalues the company and is opportunistic in nature. Accordingly, the board of FirstGroup has unanimously rejected the proposal."
No information was provided on the value of the Apollo approach. Based on its share price at the close of trading tonight, FirstGroup has a market value of around £1.2 billion.
Under takeover rules, Apollo has until 5pm on May 9 to make an offer for the company or walk away for at least six months.
FirstGroup, which runs First Bus in Scotland and the Greyhound coach service in the US, added: “There can be no certainty that any firm offer will be made nor as to the terms on which any offer might be made. A further announcement will be made in due course if and when appropriate.”
The proposal for FirstGroup came from Apollo Management IX LP, a division of Apollo Global Management which at December 27 had total assets under management of around $249 billion, according to its website.
Apollo describes itself on its website as “contrarian, value-oriented investors in private equity, credit and real assets, with significant distressed expertise.”
It adds: “We operate our business in an integrated manner which we believe distinguishes us from other alternative investment managers.”
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