FirstGroup chair Wolfhart Hauser is to stand down after 30% of investors voted against his re-election, although the train and bus operator has survived an attempt by its biggest shareholder to oust the entire board.
Shareholders voted by almost three to one to to reject 13 resolutions brought by activist investor Coast Capital seeking to remove the chief executive and five other directors, behind closed doors at an emergency general meeting in London on Tuesday.
The result may give some breathing space to First, one of the UK’s biggest bus and train operators, which is rumoured to be in line to be awarded the West Coast mainline rail franchise.
However, New York Hedge Fund Coast, which owns a 10% stake in First and was backed by the other biggest shareholder, Columbia Threadneedle, has vowed to keep up its fight to replace the board.
Describing the resignation of Hauser as a “constructive first step” in achieving value for shareholders, Coast said it “believes that FirstGroup needs and deserves a board which is populated with directors who have the relevant experience and who act to the benefit of all shareholders. We will continue to pursue this goal vigorously.”
First said shareholders had “voted decisively against Coast Capital’s attempt to take control”, but it said the board had noted that more than 20% voted in favour of several resolutions, against its recommendation. It pledged to “continue to engage with our investors over the coming weeks to discuss any views they may have”.
Hauser said after the vote that he would not be standing for re-election at the annual meeting on 25 July, leaving David Robbie as interim chairman to launch the hunt for his replacement.
Hauser said he was “confident [in] the clear path forward laid out” last month by First chief executive Matthew Gregory, whose ejection was supported by 25% of shareholders at the EGM.
Gregory’s strategy announcement, including the sell-off of US coach business Greyhound and the separation of the UK bus division, was described by Coast as too little too late.
The backing of shareholders comes as First stands on the brink of finally winning the the West Coast partnership franchise, for rights to operate intercity trains on the London-Glasgow line and see in the first HS2 highspeed services after 2026.
First, which missed out to Virgin in 2012 in the franchising fiasco, is believed to have edged the decision against the Chinese competitor on the shortlist of two, but the Department for Transport has not confirmed the award during the investor revolt.
A fresh contract would attract further shareholder scrutiny, after First made writedowns of more than £100m on both its TransPennine and South Western franchises.