First Group: General Discussion

[winston270twm]

I take it either way the current broad at First want last long? I'm surprised no one else has throw its hat into the ring.

The fact that know one else has thrown their hat in or even been rumoured to be linked to a takeover offer suggests that First as a group isn't a prized acquisition, it would be high risk. I think if someone took over the group & sold off parts, you would see far more interest.

 

[overthewater]

The fact that know one else has thrown their hat in or even been rumoured to be linked to a takeover offer suggests that First as a group isn't a prized acquisition, it would be high risk. I think if someone took over the group & sold off parts, you would see far more interest.

Isn't that what Apollo was planning to do? you would think other Private eq companies would looking to do the same? I think Tim will be gone by the summer? Of course what could someone else do that tim couldn't?

 

[TheGrandWazoo]

Isn't that what Apollo was planning to do? you would think other Private eq companies would looking to do the same? I think Tim will be gone by the summer? Of course what could someone else do that tim couldn't?

Yes but as Winston was indicating, there are few if any “prime cuts”. Hence the lack of people rushing in. However, it has probably reached the point where institutional investors’ patience and well of goodwill has been exhausted and that something more fundamental is required.

The comments about rail are as I had been told by someone in the group. GWR is good for the moment as NR fail to get the electrification done. SWR has certain caveats that are also dependent on external factors; think these include some commitments on NR infrastructure upgrades as well as the GDP and CLE baselines. TPE is the big challenge, working flat out all the time to hit the growth targets.

Think we will see more pruning from UK Bus - it’s a tough industry at the moment and I have my suspicions where further surgery will occur.

 

[overthewater]

Think we will see more pruning from UK Bus - it’s a tough industry at the moment and I have my suspicions where further surgery will occur.

Keeping the cards close to your chest

 

[Robertj21a]

Keeping the cards close to your chest

How about 'somewhere in the North'..........

 

[overthewater]

How about 'somewhere in the North'..........

Lets hope its "north" of England

 

[TheGrandWazoo]

Lets hope its "north" of England

No but aside from England and not the usual cited targets of FGM or FSY. I’ll leave it there and won’t Tell

 

[winston270twm]

Isn't that what Apollo was planning to do? you would think other Private eq companies would looking to do the same? I think Tim will be gone by the summer? Of course what could someone else do that tim couldn't?

Only Apollo know what they want First Group for at a what price, the declined offer may have been their max bid. Anything else is just guessing......

 

[overthewater]

No but aside from England and not the usual cited targets of FGM or FSY. I’ll leave it there and won’t Tell

One hopes not FSE again, its just been sorted. Personnel the only places that would be my hit list would be Berkshire, Potteries and Somerset, Anything else could be seen a throwing the baby out with the bath water, that would be the case with Glasgow or Leeds... Your one cool poker player

Only Apollo know what they want First Group for at a what price, the declined offer may have been their max bid. Anything else is just guessing......

That would be a rather strange, since most companies would never go in with the max offer, they want it cheap as possible

 

[winston270twm]

That would be a rather strange, since most companies would never go in with the max offer, they want it cheap as possible

I meant the value of Apollo's offer that fundamentally undervalues the company and is opportunistic in nature may well be all Apollo were to prepared to offer or little more. They are bidding for a mini not a Rolls Royce.....

 

[overthewater]

I meant the value of Apollo's offer that fundamentally undervalues the company and is opportunistic in nature may well be all Apollo were to prepared to offer or little more. They are bidding for a mini not a Rolls Royce.....

The Shareholders are not going to flog the mini for peanuts.

 

[Robertj21a]

I meant the value of Apollo's offer that fundamentally undervalues the company and is opportunistic in nature may well be all Apollo were to prepared to offer or little more. They are bidding for a mini not a Rolls Royce.....

They are probably bidding for a mini with only 3 wheels, a duff exhaust and some serious banging coming from the engine.

 

[winston270twm]

The Shareholders are not going to flog the mini for peanuts.

Then the shareholders will have a wait a long, long, long, er long time..... for the current directors to raise the value of the groups shares. The only thing that caused the rise from 80p was the Apollo bid, if that comes to nothing, down they go.....

They are probably bidding for a mini with only 3 wheels, a duff exhaust and some serious banging coming from the engine.

Where's the like button when you need it....

 

[TheGrandWazoo]

Then the shareholders will have a wait a long, long, long, er long time..... for the current directors to raise the value of the groups shares. The only thing that caused the rise from 80p was the Apollo bid, if that comes to nothing, down they go.....

Not quite - it had scaled 92p before Apollo’s approach was announced/declined but agree it will probably subside again!

 

[winston270twm]

Not quite - it had scaled 92p before Apollo’s approach was announced/declined but agree it will probably subside again!

Yes quite, beyond 92p was due to the actual announcement of Apollo approach, the rise from 77 - 92p whilst the offer was potentially being mulled is being investigated by the FCA remember.

https://www.ft.com/content/80b29126-3f14-11e8-b7e0-52972418fec4

Shares in FirstGroup — which owns Greyhound, the long-haul US coach service — rose 32 per cent from 77p to 101.80p in the two weeks preceding the bid announcement. This was a large enough rise to catch the attention of the FCA, the main defender in the UK against market abuse and insider trading.

 

[Robertj21a]

The Shareholders are not going to flog the mini for peanuts.

From the major shareholders point of view (and it's them that will determine the future), the current First Group management have failed to deliver. You and I know that they've tried very hard, they inherited a problem not of their own making and various issues within the industry as a whole have also worked against them. None of that really matters if you are investing £m's in the expectation of a fair return and, after many years, you're not getting anything back - there are far more lucrative companies to transfer your funds to.

I assume that, at present, there's 3 obvious scenarios -

- a good bid comes in which the shareholders accept and First Group ends up under different management
- First Group management come up with major proposals to deliver significantly improved results
- nothing much really changes and First Group continues to fade away, probably leading to another buyer soon coming along

 

[winston270twm]

They are probably bidding for a mini with only 3 wheels, a duff exhaust and some serious banging coming from the engine.

Robertj21a - It must have been the above comment that did it.........

https://uk.reuters.com/article/us-f...lks-away-from-first-group-offer-idUKKBN1I90JN

LONDON (Reuters) - U.S. private equity firm Apollo Global Management (APO.N) said on Tuesday it does not intend to make an offer to acquire British bus and rail operator FirstGroup (FGP.L).

In April, Aberdeen-based FirstGroup, which has a market value of about 1.2 billion pounds ($1.70 billion), rejected a cash proposal from the U.S. fund. .

I think O'Toole might as well start packing up his desk......

 

[overthewater]

And look at that share price go! What now? It does look like no one else will want to do a takeover, I'm still wondering what someone else can do that tim hasn;t

 

[winston270twm]

And look at that share price go! What now? It does look like no one else will want to do a takeover, I'm still wondering what someone else can do that tim hasn;t

Someone else could come with a revised strategy / take the company in a new direction long term. Look at what Dean Finch did for NX Group and how that group has gone from on it's knee's to currently best performer with continual profit growth.

 

[TheGrandWazoo]

And look at that share price go! What now? It does look like no one else will want to do a takeover, I'm still wondering what someone else can do that tim hasn;t

Yes, though as me and Winston said, that was always going to happen.

Winston is also right that there are a number of strategies that can be pursued; that could be splitting the business into UK and US businesses and spinning one from t’other. They could flog off something like Greyhound.

I understand the logic of the 2012 plan and the rights issue was necessary. Whether they should have sold London bus ops - well, I suppose they wanted out of a capital heavy, lower margin business. That the wider industry has faltered and especially in most of the former North/Scotland power base is something that they should have envisaged...

However, it is clear that the goodwill pool is exhausted and that incremental improvements aren’t enough IMHO for investors. End of the month will be interesting to see the full year figures and if any mention of dividend restoration is made.

 

[overthewater]

One things is for sure something going to change... I still expected another p.e. to take an interest.

In better news Glasgow is getting between 75 to 100 brand new e400mmc. I think most could live with that if another 200 New buses turn in 2019 -2021. That would eailsy allow other euro 6 stock to be shipped plus retrofitting 58plates and younger.

 

[TheGrandWazoo]

One things is for sure something going to change... I still expected another p.e. to take an interest.

In better news Glasgow is getting between 75 to 100 brand new e400mmc. I think most could live with that if another 200 New buses turn in 2019 -2021. That would eailsy allow other euro 6 stock to be shipped plus retrofitting 58plates and younger.

Really?

What’s making you think that someone else is going to come in where Apollo feared to tread?

 

[winston270twm]

Yes, though as me and Winston said, that was always going to happen.

Winston is also right that there are a number of strategies that can be pursued; that could be splitting the business into UK and US businesses and spinning one from t’other. They could flog off something like Greyhound.

I understand the logic of the 2012 plan and the rights issue was necessary. Whether they should have sold London bus ops - well, I suppose they wanted out of a capital heavy, lower margin business. That the wider industry has faltered and especially in most of the former North/Scotland power base is something that they should have envisaged...

However, it is clear that the goodwill pool is exhausted and that incremental improvements aren’t enough IMHO for investors. End of the month will be interesting to see the full year figures and if any mention of dividend restoration is made.

Statement from FGP re: Apollo withdrawal:
http://otp.investis.com/generic/regulatory-story.aspx?newsid=1007173&cid=858

FirstGroup plc statement re withdrawal of Apollo

The Board of FirstGroup plc (“FirstGroup” or the “Company”) notes the announcement made by Apollo Global Management, LLC ("Apollo") on behalf of certain of its affiliates that it does not intend to make an offer for FirstGroup.

In recent weeks the Board of FirstGroup received two preliminary and highly conditional indicative proposals from Apollo relating to a possible cash offer for the entire issued and to be issued ordinary share capital of FirstGroup (the “Proposals”). Having considered them in detail, the Board of FirstGroup concluded that the Proposals fundamentally undervalued the Company. Accordingly, the Board of FirstGroup unanimously rejected the Proposals.

The Board of FirstGroup continues to believe in the strong prospects for shareholder value creation available to the Company. FirstGroup will publish its full year results for the year to 31 March 2018 on 31 May and will update the market on the Company's outlook at that time.

This announcement has been made by FirstGroup without the agreement or approval of Apollo.

In accordance with Rule 26.1 of the City Code on Takeovers and Mergers (the "Code"), a copy of this announcement will be available on FirstGroup’s website at www.firstgroupplc.com by no later than 12 noon (London time) on 9 May 2018. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement. The person responsible for arranging the release of this announcement on behalf of FirstGroup is Michael Hampson, Group General Counsel and Company Secretary.

This is what I believe is attracting interest from the FCA, FGP are now saying in recent weeks they've had two preliminary offers from Apollo, it's the first FGP shareholders have heard about it until Apollo have announced they will not be making a formal offer:

In recent weeks the Board of FirstGroup received two preliminary and highly conditional indicative proposals from Apollo relating to a possible cash offer for the entire issued and to be issued ordinary share capital of FirstGroup (the “Proposals”). Having considered them in detail, the Board of FirstGroup concluded that the Proposals fundamentally undervalued the Company. Accordingly, the Board of FirstGroup unanimously rejected the Proposals.

 

[TheGrandWazoo]

Statement from FGP re: Apollo withdrawal:
http://otp.investis.com/generic/regulatory-story.aspx?newsid=1007173&cid=858



This is what I believe is attracting interest from the FCA, FGP are now saying in recent weeks they've had two preliminary offers from Apollo, it's the first FGP shareholders have heard about it until Apollo have announced they will not be making a formal offer:

In recent weeks the Board of FirstGroup received two preliminary and highly conditional indicative proposals from Apollo relating to a possible cash offer for the entire issued and to be issued ordinary share capital of FirstGroup (the “Proposals”). Having considered them in detail, the Board of FirstGroup concluded that the Proposals fundamentally undervalued the Company. Accordingly, the Board of FirstGroup unanimously rejected the Proposals.

Depends on the chronology which is what the FCA will look to establish.

 

[Baxenden Bank]

Isn't that what the city wide-boys do all the time? Identify and buy some low valued shares, talk up the market, sell those shares at the higher price. Lovely Jubbly. The fools are the ones that jumped on the bang-waggon, paying the higher price with an expectation of a subsequent formal bid making the price higher still. Greed is Good. Apparently. Time for lunch, which is for wimps after all.

 

[Islineclear3_1]

As I suggested (before they announced they were cutting the locals)

It was the Walton route I had in mind. Not knowing the other routes but local routes in depressed small towns with loads of pensioners isn’t that lucrative so thought they may keep and interwork Walton and possibly Harwich.

Last week's Clacton Gazette told the news that First were pulling out and that Hedingham were interested in expanding their routes. Not sure if that meant the main routes (e.g. Colchester - Clacton - Walton etc) or the residential areas

 

[TheGrandWazoo]

Last week's Clacton Gazette told the news that First were pulling out and that Hedingham were interested in expanding their routes. Not sure if that meant the main routes (e.g. Colchester - Clacton - Walton etc) or the residential areas

This may help you https://www.hedingham.co.uk/news/clacton/

 

[Islineclear3_1]

This may help you https://www.hedingham.co.uk/news/clacton/

Very useful - thank you

What's going to happen with Route 8/8A Clacton - Frinton - Walton, will this stay under First or are further details still to be finalise?

 

[InspectorBloke]

Very useful - thank you

What's going to happen with Route 8/8A Clacton - Frinton - Walton, will this stay under First or are further details still to be finalise?

First are keeping the Clacton-Walton route. I expect it will either be interworked or merged with the Colchester-Clacton route.

https://www.firstgroup.com/essex/ne.../first-essex-announcement-clacton-bus-network

FIRST ESSEX ANNOUNCEMENT - CLACTON BUS NETWORK

Bus operator, First Essex, has announced proposals to close its operating base in Clacton and discontinue running local bus services 2, 3, 4/4a, 5/5a and 6.

Under the proposal, services between Clacton and Colchester, and between Clacton and Walton on the Naze will be unaffected and continue to be operated by First Essex, seven days per week.

First Essex has said that its bus operation in Clacton has not been viable for several years.

Steve Wickers, Managing Director of First Essex. said: “I’m disappointed that we are proposing to withdraw services in Clacton, but regrettably, we see no alternative. Despite our best efforts and hard work to encourage people to use the service network in the town, customers have declined gradually over the last couple of years.

“Unfortunately, the level of demand is not enough to warrant a stand-alone bus operation in Clacton.

“We are proposing to continue running services as normal, however, we are engaging with Essex County Council on the future of bus services in the area. Given the volume of other bus operators that operate in and around Clacton, I’m confident that customers shouldn’t be left without a service.”

Further Updates;

We will provide further updates regarding the progression and developments of the proposal as and when they happen, so please keep checking this page over the forthcoming weeks

 

[baza585]

This may help you https://www.hedingham.co.uk/news/clacton/

Interesting similarity between the strategies on the two groups with happenings in Southampton. Whenever First give up a route in Southampton, GA take it up (seemingly regardless of loadings and hence profitability); seems like this is happening in Clacton too. GA are into volume; First seem to want each route to at least wash its face.

Which strategy is correct? Only time will tell but FWIW, the First approach seems much closer to Stagecoach than GA going for volume and hence spreading overheads (only works if the new route is at least break even on a marginal cost basis.