First Group’s largest shareholder demands chief executive resigns as it steps up battle with transport group
Fist Group’s largest shareholder has demanded its chief executive resign as it steps up its battle with the transport group.
Coast Capital urged Matthew Gregory and two board directors to step down after the company sold two North American businesses for a price it thinks was far too cheap.
The US hedge fund, which owns around 14 per cent of FTSE 250-listed First Group, said Gregory was a ‘chief executive who has failed for long enough’.
End of the line: Coast Capital urged Matthew Gregory and two board directors to step down
It also took aim at board members Julia Steyn and Warwick Brady, the former boss of Esken, which was previously known as Stobart Group.
Last week, First completed the sale of its sprawling US transport business to Swedish private equity group EQT Infrastructure for £3.3billion.
It also boosted shareholder returns by 37 per cent to £500m, using some of the proceeds from the sale as a top-up.
The deal included First Student, which runs America’s yellow school buses. Coast’s found ing partner, James Rasteh, slammed the sale, saying it ‘stinks to the heavens’ and left ‘billions of dollars on the table’.
Coast has now said it made alternative deal proposals to the board, which were ignored.
But Coast was not alone in its fight against the EQT sale. Another significant investor, Schroders, also spoke out against it and proxy adviser Glass Lewis recommended voting against it. At a meeting in May, First won the support of 61 per cent of votes cast.
Gregory took over at First in 2018. In a statement, Coast blasted him for reneging on his original plan to sell First’s UK transport business. It also criticised Steyn and Brady.
First declined to comment on the demand for the resignations. It added: ‘We consistently engage on a variety of topics with all our major shareholders. We have carefully considered Coast Capital’s various outline and initial ideas for the business.’