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Apollo urged to rebid for embattled FirstGroup as 'fresh face needed at helm'

US private equity giant Apollo Management should rebid for the embattled rail firm FirstGroup because the company needs a “fresh face at the helm”, one investor has said.
FirstGroup revealed last month it had rejected an offer from Apollo, which it claimed “fundamentally undervalues” the company.
The details of the approach were not disclosed but an investor has now called on Apollo to make a bid before the May 9 deadline after which there would be a six-month moratorium on any offers.
“I do think the management team is under pressure,” the investor, who asked not to be identified, said.?“Tim O’Toole [the current chief executive of FirstGroup] has been there a long time and not much seems to be happening so I think it does need a fresh face at the helm.”
First Group plc
The investor added that a formal bid from Apollo, which runs more than $250bn (?185bn) across its funds, would “give shareholders a choice” about what to do with their stake in the company, saying that the Aberdeen-based transport firm was worth more than its share price suggested.
“I do think there is value in this company,” the investor said. “It’s just a question of getting it out and it isn’t being evidenced at the moment.”
An American private equity company’s involvement in UK rail could prove controversial given the reignited political tensions surrounding the industry amid the default on the East Coast mainline by Stagecoach and Virgin Trains.
Apollo urged to rebid for embattled FirstGroup as 'fresh face needed at helm'

The Stagecoach and Virgin Trains joint venture which runs the East Coast mainline will hand back control of the franchise five years early

Credit:
PA
Calls have been made by the Labour Party for the railway to be renationalised in the wake of the decision by the two train firms to hand back the keys to the contract five years early.
But the investor reckoned Apollo would probably sell the UK rail business and potentially its UK bus division too, leaving a more focused US entity.
Across the Atlantic, FirstGroup has a school bus business and a corporate transit division. It also owns the ­leisure-focused Greyhound coach ­company.
Both FirstGroup and Apollo Management declined to comment.
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