First Group: General Discussion

[Volvodart]

On First Bus site “Today we announced that we will be pursuing strategic options, through a sale or other means, to separate First Bus from FirstGroup.” - sale outright or an IPO?

The BBC also mentions merger. I do not know where they got that from.

 

[overthewater]

It seems we finally have action!

It says 'separation' of First Bus, not 'sale' like when referring to Greyhound.

On First Bus site “Today we announced that we will be pursuing strategic options, through a sale or other means, to separate First Bus from FirstGroup.” - sale outright or an IPO?

Yip sounds like sale to me, First - First splits the the in two, then secondly there try and figure out who get which parts of the debt, which isn't easy. We still don't know what could have sell is up for grabs.

This is the interesting bit....

First Bus has limited synergies with our other operations and, having set the business on the path to increased profitability, we believe now is the right time to pursue structural alternatives to continue this progression and deliver value to shareholders while managing the division’s longer term liabilities.

Are First admitting there can't do much for UK BUS?

The BBC also mentions merger. I do not know where they got that from.

BBC seems to care more about Greyhound being sold and UK BUS!?

 

[DragonEast]

could it be putting FirstBus into a joint venture? First Group clearly haven't or aren't prepared to put in the resources to invest as buses need for the future. That much has been apparent for years. They couldn't keep kicking the can down the road for ever. Trouble is what's the point for First (though they have to find a way of dealing with historic pension liabilities, whatever), and who (not presently at large in the UK) would join in, and sink a load of capital for a possible minority stake? The Far East I suppose are looking for opportunities, and given the volatile political climate, alliances are the way forward, perhaps as they have become in rail franchising?

 

[overthewater]

I have changed the titles of the thread to: Restructuring and survival, we still don't know what is going to happen in the long run. I think we will all agree First has mist the boat on Greyhound... and I just can't see who would want to buy it now.

I think we can't rule out National express, if there say here a bag of money for certain parts I think First would be foolish not to take it. However First have again left it far to late because Arriva is also up for sale thus is a Buyers market....

I just can't see who would want to buy all of First bus, just like buying ALL of arriva.

 

[TheGrandWazoo]

Yip sounds like sale to me, First - First splits the the in two, then secondly there try and figure out who get which parts of the debt, which isn't easy. We still don't know what could have sell is up for grabs.

This is the interesting bit....


Are First admitting there can't do much for UK BUS?



BBC seems to care more about Greyhound being sold and UK BUS!?

Think you're reading that wrong. What they're saying is that they have spent time sorting out business (remember, they had a real challenge just to meet DDA requirements) and margins were sliding. They've spent time sorting out some of the fundamentals in terms of cost base, revenue growth and margins and, having done that, it's now time to spin it off.

I'm sure that they will also be of the view that it's a sound business with lots of potential. That's not to gloss over the problems that still exist in UK Bus and some of the weaker operations.

could it be putting FirstBus into a joint venture? First Group clearly haven't or aren't prepared to put in the resources to invest as buses need for the future. That much has been apparent for years. They couldn't keep kicking the can down the road for ever. Trouble is what's the point for First (though they have to find a way of dealing with historic pension liabilities, whatever), and who (not presently at large in the UK) would join in, and sink a load of capital for a possible minority stake? The Far East I suppose are looking for opportunities, and given the volatile political climate, alliances are the way forward, perhaps as they have become in rail franchising?

I don't automatically see a JV being a likely route (though it can't be discounted). More likely that they will look to divest via either a spin off and separate listing or via a sale to an equity group.

 

[Mwanesh]

Arriva is in better shape abroad.First have been stingy on fleet renewal that it has caught up with them.Of the big groups i would say National Express ,Stagecoach and Go Ahead have invested in fleets over the years.

 

[TheGrandWazoo]

I have changed the titles of the thread to: Restructuring and survival, we still don't know what is going to happen in the long run. I think we will all agree First has mist the boat on Greyhound... and I just can't see who would want to buy it now.

I think we can't rule out National express, if there say here a bag of money for certain parts I think First would be foolish not to take it. However First have again left it far to late because Arriva is also up for sale thus is a Buyers market....

I just can't see who would want to buy all of First bus, just like buying ALL of arriva.

Are these puns.... "I think we will all agree First has mist the boat on Greyhound... and I just can't see who would want to buy it now."

In terms of Greyhound, it might be more attractive because of the property portfolio rather than anything else.

As for the issue of it being a buyers' market, again I think you're being a bit parochial in that view. It may well not be a transport grouping that would buy it and, even if it were, you have a business with good cashflow, improving margins and probably some areas where growth potential exists.

 

[overthewater]

I do love accidental puns How big is Greyhound Portfolio? I know it has alot of bus station so it has to be on top of that.

This restructuring has clearly been on the cards for a while, which makes me think back to what National Express said a while ago, could Nat Express sweep in and take UK bus and sort it out? I take it this is the also reason why the other two depots are Manchester has not been sold?

 

[Railman10]

This is an ideal opportunity for Councils to take back buses into public ownership. First Greater Manchester would be a good starter. Perhaps the Mayor should get in early and start the ball rolling.

If First Group services are merely sold off to the likes of Stagecoach, they will still be run only on a commercial basis and the operators will charge the earth for running non-profitable services. Only by being publicly owned will the Councils be able to use income from profitable routes (of which there are many) to be used to support less profitable but nevertheless essential services.

 

[overthewater]

This is an ideal opportunity for Councils to take back buses into public ownership. First Greater Manchester would be a good starter. Perhaps the Mayor should get in early and start the ball rolling.

If First Group services are merely sold off to the likes of Stagecoach, they will still be run only on a commercial basis and the operators will charge the earth for running non-profitable services. Only by being publicly owned will the Councils be able to use income from profitable routes (of which there are many) to be used to support less profitable but nevertheless essential services.

Im sorry but your in cloud coo coo land, Councils have no money for important things let alone buying bus companies. Stagecoach will not be allowed a 100 mile of buying Frst.

 

[TheGrandWazoo]

I do love accidental puns How big is Greyhound Portfolio? I know it has alot of bus station so it has to be on top of that.

This restructuring has clearly been on the cards for a while, which makes me think back to what National Express said a while ago, could Nat Express sweep in and take UK bus and sort it out? I take it this is the also reason why the other two depots are Manchester has not been sold?

I understand that the sales of Manchester (or not) are unrelated to this announcement.

This is an ideal opportunity for Councils to take back buses into public ownership. First Greater Manchester would be a good starter. Perhaps the Mayor should get in early and start the ball rolling.

If First Group services are merely sold off to the likes of Stagecoach, they will still be run only on a commercial basis and the operators will charge the earth for running non-profitable services. Only by being publicly owned will the Councils be able to use income from profitable routes (of which there are many) to be used to support less profitable but nevertheless essential services.

Apart from the fact that councils have got no money to make such purchases.

 

[Jordan Adam]

This is an ideal opportunity for Councils to take back buses into public ownership. First Greater Manchester would be a good starter. Perhaps the Mayor should get in early and start the ball rolling.

If First Group services are merely sold off to the likes of Stagecoach, they will still be run only on a commercial basis and the operators will charge the earth for running non-profitable services. Only by being publicly owned will the Councils be able to use income from profitable routes (of which there are many) to be used to support less profitable but nevertheless essential services.

With some councils maintenance records they probably wouldn't be allowed to! Never mind the whole funding issues.

 

[winston270twm]

On First Bus site “Today we announced that we will be pursuing strategic options, through a sale or other means, to separate First Bus from FirstGroup.” - sale outright or an IPO?

They've come this far as a group, don't see any merit in now selling First UK bus. Whilst the decision to sell Greyhound has been needed for some time, unfortunately with how long it has taken them to reach that decision, Greyhound will not now command the sale price it could have done.

 

[Robertj21a]

This is an ideal opportunity for Councils to take back buses into public ownership. First Greater Manchester would be a good starter. Perhaps the Mayor should get in early and start the ball rolling.

If First Group services are merely sold off to the likes of Stagecoach, they will still be run only on a commercial basis and the operators will charge the earth for running non-profitable services. Only by being publicly owned will the Councils be able to use income from profitable routes (of which there are many) to be used to support less profitable but nevertheless essential services.

Good heavens, please don't let councils get in again !!
Be careful what you wish for.

 

[overthewater]

I take it this new First bus uk company will be like comcast owning Sky UK, it owns it but if that goes pop it can run away without money owned?

 

[TheGrandWazoo]

They've come this far as a group, don't see any merit in now selling First UK bus. Whilst the decision to sell Greyhound has been needed for some time, unfortunately with how long it has taken them to reach that decision, Greyhound will not now command the sale price it could have done.

I don't dispute the Greyhound problem. One wonders what may have been had Moir not tried to strongarm Souter when he was interested. Think Moir wanted £1bn, whilst Souter offered £750m IIRC?

Arguably, we have saying that there would be a UK/US split and that's almost what you have. Split the two apart and if the UK operations no longer have rail (as might be the case), then what you're left with is just UK Bus anyway.

It'll be interesting to see what Coast Capital do now. They were urging this break up so will they now argue that it's not enough??

 

[Big Ralphie]

It was spoke about councils getting start up money to run there own bus company from the government but I don't think this would be a good idea as most councils are already in debt and would have no real experience in doing this.

 

[Baxenden Bank]

BBC seems to care more about Greyhound being sold and UK BUS!?

BBC news seems to be heavily US orientated nowadays. Often you click on a website story to find it is about a US company and wholly irrelevent to Britain. I wonder what the first B in BBC now stands for (other than Babestation).

 

[DragonEast]

I don't automatically see a JV being a likely route (though it can't be discounted). More likely that they will look to divest via either a spin off and separate listing or via a sale to an equity group.

Yep, an equity group would have the advantage of doing the necessary rationalisation without all this blaze of publicity imposed on quoted companies (or rebellious shareholders).

 

[TheGrandWazoo]

BBC news seems to be heavily US orientated nowadays. Often you click on a website story to find it is about a US company and wholly irrelevent to Britain. I wonder what the first B in BBC now stands for (other than Babestation).

Also, got to remember that Greyhound is THE name that the average Joe will have heard of. If you live in the North East, will you actually know who First Group are (unless you're an industry watcher)?

 

[winston270twm]

I don't dispute the Greyhound problem. One wonders what may have been had Moir not tried to strongarm Souter when he was interested. Think Moir wanted £1bn, whilst Souter offered £750m IIRC?

Arguably, we have saying that there would be a UK/US split and that's almost what you have. Split the two apart and if the UK operations no longer have rail (as might be the case), then what you're left with is just UK Bus anyway.

It'll be interesting to see what Coast Capital do now. They were urging this break up so will they now argue that it's not enough??

Moir was only ever interested inbeing No 1 & the biggest, don't forget after Laidlaw acquisition, he also approach NX Group about a merger on top. Greed which has clearly backfired for the group, they should have ditched it whilst they had the chance at a good price. No doubt Flixbus will get for a knocked down price, I hope they at least retain the Greyhound property portfolio that came with & sell that off separately.

Now First have acknowledged they are prepared to split off First UK Bus, there's always a remote possibility that NX Group could make a takeover approach just for UK bus with it being a smaller entity / lower risk? Dean Finch certainly knows the business well. I suspect it will still be too big / risky deal though, but opportunities such as that don't present themselves that often...….

I somehow don't think that will be the end of Coast Capital and they will go quiet.... I think that was phase 1, next dividend or special dividend to return some value to shareholders.

Finally agreeing to sell Greyhound & split of First UK Bus is all well and good, but they're doing it at the same time as DB are selling off Arriva, Arriva being in much better shape as far as I'm aware.

 

[Volvodart]

Gregory said he wants things to proceed "at pace" which probably excludes anyone with competition issues.

 

[winston270twm]

Gregory said he wants things to proceed "at pace" which probably excludes anyone with competition issues.

Nothing at First happens "at pace", how long have the Manchester depot sales been dragging on.... still only 1 of 3 sold.

Excluding anyone with competition concerns also restricts demand and final sale price.

 

[Baxenden Bank]

Yes but where affects us. Most of us had a Woolies and have cherished memories and it’s demise affected most people. You live in Surrey.

Just find it odd that a strong emotion like hate or euphoria is experienced vicariously.

Most of us had a Woollies, we remembered it fondly but then shopped elsewhere anyway.
Most of us had a bus service, we remembered it fondly, but then travelled by other means anyway!

 

[winston270twm]

The excitement on the Stock market announcement has petered out, having opened up +12% on the news first thing, now circa 4.5% up.

 

[Robertj21a]

Moir was only ever interested inbeing No 1 & the biggest, don't forget after Laidlaw acquisition, he also approach NX Group about a merger on top. Greed which has clearly backfired for the group, they should have ditched it whilst they had the chance at a good price. No doubt Flixbus will get for a knocked down price, I hope they at least retain the Greyhound property portfolio that came with & sell that off separately.

Now First have acknowledged they are prepared to split off First UK Bus, there's always a remote possibility that NX Group could make a takeover approach just for UK bus with it being a smaller entity / lower risk? Dean Finch certainly knows the business well. I suspect it will still be too big / risky deal though, but opportunities such as that don't present themselves that often...….

I somehow don't think that will be the end of Coast Capital and they will go quiet.... I think that was phase 1, next dividend or special dividend to return some value to shareholders.

Finally agreeing to sell Greyhound & split of First UK Bus is all well and good, but they're doing it at the same time as DB are selling off Arriva, Arriva being in much better shape as far as I'm aware.

I think it's generally accepted that Arriva is a far more attractive purchase than First Bus will ever be.

 

[winston270twm]

I think it's generally accepted that Arriva is a far more attractive purchase than First Bus will ever be.

European ops definitely, some of their UK ops at opposite ends of the scale. First does have far more former PTE ops compared with Arriva.

I personally think First should have opted to sell both Greyhound & UK Rail, stick to US & UK bus, I'm sure UK bus could be improved further with further investment & bolt-on acquisitions.

Interesting times ahead with all the potential bus ops that could be changing hands.

 

[TheGrandWazoo]

Most of us had a Woollies, we remembered it fondly but then shopped elsewhere anyway.
Most of us had a bus service, we remembered it fondly, but then travelled by other means anyway!

Yeah, and I get why YOU are angered/disappointed/euphoric etc. You are directly impacted. I also live in First-land (though a better OpCo) but I don't understand how people who aren't affected can be SO emotional.

I wasn't upset when Jock McTavish's sweet shop closed in Inverurie but might have been bothered when I couldn't get my pick and mix in Woolies in Frome!

Now First have acknowledged they are prepared to split off First UK Bus, there's always a remote possibility that NX Group could make a takeover approach just for UK bus with it being a smaller entity / lower risk? Dean Finch certainly knows the business well. I suspect it will still be too big / risky deal though, but opportunities such as that don't present themselves that often...….

I somehow don't think that will be the end of Coast Capital and they will go quiet.... I think that was phase 1, next dividend or special dividend to return some value to shareholders.

Finally agreeing to sell Greyhound & split of First UK Bus is all well and good, but they're doing it at the same time as DB are selling off Arriva, Arriva being in much better shape as far as I'm aware.

Gregory said he wants things to proceed "at pace" which probably excludes anyone with competition issues.

Nothing at First happens "at pace", how long have the Manchester depot sales been dragging on.... still only 1 of 3 sold.

Excluding anyone with competition concerns also restricts demand and final sale price.

It could be a sale to NX but, as with DB flogging Arriva, they are not wanting to be bogged down with various competition issues and CMA investigations, let alone a protracted piecemeal sell off where there remains the risk of being left with stuff like Buses of Somerset. Hence why a public offering or a sale to an equity group is still the better option for both DB and for First.

Appreciate the view that the fact that Arriva is for sale might be viewed as a buyers market etc but remember... the results posted have seen the turnover remain constant (despite it being a 52 wk rather than a 53 wk year) with margins and op profits increasing markedly. There may be a limited number of transport businesses who are interested but I'm not certain that is where either Arriva nor First Bus will end up.

Many capital investment firms will look to concentrate in one or more related markets; others have a disparate set of interests. One of the latter is unfortunately Greybull Capital who, as well as having British Steel, had interests in retail, high end electronics, consumer goods etc. In the event, they can always go for an IPO and simply spin it off that way - that's the way my first employer went when it was divested from the parent group.

 

[In Focus]

Is it significant that with Greyhound it states a "formal sale process is underway " however Firstbus UK is worded as "pursue structural alternatives to continue the progression" that would read to me as though they want to retain some parts of UK bus?

 

[TheGrandWazoo]

Is it significant that with Greyhound it states a "formal sale process is underway " however Firstbus UK is worded as "pursue structural alternatives to continue the progression" that would read to me as though they want to retain some parts of UK bus?

I think you're reading that wrong.

The first line is clear "Today we announced that we will be pursuing strategic options, through a sale or other means, to separate First Bus from FirstGroup". The structural alternatives could be an outright sale to another party - this is what they are doing for Greyhound.

Alternatively, the "other means" could be that they spin First Bus off with a separate stock market listing via an Initial Public Offering (IPO).