Greyhound buses put up for sale by UK owner
Posted May 30, 2019 9:08 a.m. EDT
CNN — Greyhound has been put up for sale after its UK owner caved to activist investors who wanted the company to ditch the bus line.
FirstGroup, which owns the iconic inter-city bus operation, said Thursday that it wants to focus on its school transportation and commuter businesses.
The company said in a statement that Greyhound has "limited synergies" with its other businesses in North America and that "value for shareholders can best be delivered by seeking new owners."
"Our plans will create a more focused portfolio, with leading positions in our core North American contracting markets," added CEO Matthew Gregory.
The company owns American school bus service First Student, which it says is the largest in North America. Its First Transit brand offers shuttle buses and other services to commuters in the United States.
FirstGroup said the two divisions generate a combined 60% of the its operating profits and increasingly overlap in terms of the technologies and skills they require. Shares in FirstGroup surged almost 5% in London after the announcement.
Greyhound said it serves 2,400 destinations across the United States and Canada, transporting nearly 16 million passengers each year.
The separation is a big win for activist shareholder group Coast Capital Management, which owns just under 10% of FirstGroup.
Coast Capital Management had been pushing FirstGroup's board to separate its businesses in the United Kingdom and North America.
The investor group said that while it welcomed the plan announced Thursday, it still wants to take control of FirstGroup's board by replacing six of the current 11 directors.
Coast Capital said it has "no confidence in the ability of the current board to deliver the changes needed to best effect, as there is precious little expertise in surface transport among the current lineup, especially in a US context."