FirstGroup is considering a sale of all its North American businesses, in an apparent reversal of strategy only months after the struggling transport group said it would focus primarily on its US bus operations.
The group said it had appointed advisers to explore options, including the potential disposal of First Student, which operates about 43,000 yellow school buses, and First Transit, which provides outsourced public transport.
The third US division, Greyhound, which operates the famous intercity coaches, was put up for sale in May.
The turnaround comes after FirstGroup was announced the winner of the West Coast Partnership franchise in the UK, which secures a longer term future in rail. The group’s chief executive, Matthew Gregory, had hinted at an eventual withdrawal after the expiry of current contracts. Franchises it runs include South Western Railway and TransPennine Express, both of which have been beset by problems.
FirstGroup said its chairman, David Martin, had been reviewing various strategic options since his appointment four months ago.
While Gregory had promised to hive off UK bus operations, the company aims to push through a cost-cutting programme to boost profits before putting it up for sale.
First has been under pressure from investors, including the US-based Coast Capital and the property investor Robert Tchenguiz, to split up the group and focus on core businesses. Last month they called on the group to jettison the plan announced in May and sell off the US divisions.
Gregory said: “Today’s announcement to formally explore all options to maximise value from our North American businesses reflects the resolute focus of the entire board on realising value for all shareholders.”
The Aberdeen-based FirstGroup employs about 100,000 people and transported 2.2 billion passengers last year. The share price rose by more than 5% on Monday on the back of the announcement.
