First Group’s largest shareholder demands CEO resignation as it ramps up battle with transport group transport
Fist Group’s largest shareholder has demanded the resignation of its CEO as it ramps up its battle with the transport group.
Coast Capital urged Matthew Gregory and two board members to step down after the company sold two North American companies at a price it believed was far too cheap.
The US hedge fund, which owns about 14 percent of the FTSE 250-listed First Group, said Gregory was a “top executive who failed long enough.”
End of the line: Coast Capital urged Matthew Gregory and two board members to resign
It also targeted board members Julia Steyn and Warwick Brady, the former boss of Esken, formerly known as Stobart Group.
Last week, First completed the sale of its sprawling US transportation business to Swedish private equity group EQT Infrastructure for £3.3 billion.
It also increased shareholder return by 37 percent to £500 million, with a portion of the proceeds from the sale being used as a supplement.
The deal included First Student, who drives America’s yellow school buses. Coast’s found partner, James Rasteh, turned down the sale, saying it “stinks to heaven” and “put billions of dollars on the table.”
Coast has now said it has made alternative deal proposals to the board, which have been ignored.
But Coast wasn’t alone in his battle against EQT sales. Another major investor, Schroders, also spoke out against it, and proxy advisor Glass Lewis recommended voting against. At a meeting in May, First received the support of 61 percent of the votes cast.
Gregory took over from First in 2018. In a statement, Coast reprimanded him for abandoning his original plan to sell First’s British transport company. It also criticized Steyn and Brady.
First declined to comment on the request for the resignation. It added: “We consistently engage in discussions on a variety of topics with all our major shareholders. We carefully considered Coast Capital’s various outlines and initial ideas for the company.”