UK transport firm FirstGroup rejects latest private-equity approach

(Reuters) -British transport firm FirstGroup said on Thursday it had turned down the latest takeover approach of 118 pence per share in cash and a contingent right of up to 45.6 pence apiece from private-equity firm I Squared Capital.

The company said the cash component of the possible offer “significantly undervalues FirstGroup’s continuing operations and its future prospects” while the contingent right “does not provide shareholders with sufficient certainty.”

The bus and rail operator had said last month it got the new proposal after it rejected previous approaches from I Squared — a global infrastructure firm focusing on energy, utilities, telecom and transport in the Americas, Europe and Asia.

London-listed shares of FirstGroup, which has a market value of about 1 billion pounds ($1.25 billion), had jumped after the proposal was disclosed on May 26.

The company, which is the latest of several British firms to attract buyout interest from an investment firm, sold its North American operations in the past year and also offloaded its iconic Greyhound intercity bus brand.

($1 = 0.7990 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; editing by Uttaresh.V)