• First Group rejects I Squared Capital Advisors latest bid
• The rejection is said to undervalue the company
• First Group shares fell 4% on the news

Transport firm First Group announced Thursday morning that it has rejected the latest offer from I Squared Capital Advisors as the bid undervalues the company. 

The UK bus and train operator has received a series of offers following news it is withdrawing from its move into North America to focus on the UK market. 

I Squared’s bid included a cash component of 118p per share, and a contingent right to up to a further 45.6p per share based on the outcome of the First Transit earnout and the proceeds from the Greyhound legacy assets and liabilities. Last year First Group sold Greyhound, an intercity US coach business, for £125 million.

“The Board, having carefully evaluated the Proposal together with its advisers, concluded that the cash component of 118 pence per FirstGroup share significantly undervalues FirstGroup’s continuing operations and its future prospects, and the contingent right to up to 45.6 pence per FirstGroup share does not provide shareholders with sufficient certainty,” said First Group. 

The latest in a series of bids from I Squared, which the company described as “unsolicited, conditional proposals,” was on May 26.

First Group shares have tumbled more than 4% Thursday following the news. 

However, its shares are up more than 30% in 2022.