Business
Statement re: Sale of First Student and First T...
Statement re: Sale of First Student and First T....
About this update from Firstgroup Plc
[{"type":"text","content":"\n \n FIRSTGROUP PLC\nSTATEMENT RE: SALE OF FIRST STUDENT AND FIRST TRANSIT\n FirstGroup plc (‘FirstGroup’ or the ‘Group’) notes the further statement by Coast Capital LLC on 19 May 2021 in relation to the agreed sale of First Student and First Transit to EQT Infrastructure announced on 23 April 2021 (the 'Sale').\n The Board unanimously believes that this transaction is in the best interests of all shareholders and strongly recommends that shareholders vote in favour of the Sale. The Board has received financial advice from Rothschild & Co, J.P. Morgan Cazenove and Goldman Sachs in relation to the Sale.\n The Board welcomes the reports from proxy advisory agencies ISS, IVIS and PIRC which also recommend that shareholders support the Sale. \n Full details of how to vote are set out in the circular to shareholders published on 10 May.\n The Board reiterates that:\n \n A comprehensive and competitive sale process has been followed which was well publicised for more than a year\n \n \n The Board is therefore confident that the Sale at $4.6bn represents a full strategic value that looks beyond the pandemic and reflects the high quality and long-term nature of these assets\n \n \n In the context of that competitive process, we negotiated a detailed earnout structure for First Transit worth up to $240m. FirstGroup will receive 62.5% of First Transit's value above $380m either on the third anniversary of the Sale or sooner if Transit is sold to a third party\n \n \n The Group, including the Chairman, has consistently engaged with Coast Capital over several years, carefully considered their proposals and followed up on introductions they have proposed\n \n Corrections to Coast Capital's inaccurate statements\n Coast Capital's latest statement contains numerous inaccuracies, including in relation to the transaction multiples, as explained below.\n EBITDA multiple\n In the announcement of 23 April, the Group disclosed a transaction multiple of 8.9x March 2020 EBITDA. Coast Capital’s stated alternative EBITDA multiple is grossly misleading by 2.4x for the following reasons:\n \n it incorrectly compares GBP EBITDA and the USD Sale value at materially different exchange rates ($1.29:£1 and $1.40:£1 respectively) rather than performing the calculation based on the underlying US dollar values which are reported (a difference of 0.6x E...