FirstGroup (LSE: FGP) has had a year to forget. Its aggressive pitch for the West Coast rail franchise backfired and led to a £600m cash call to shareholders. In return they have seen their dividend payments scrapped and the value of their investment sink.
Activist shareholder Sandell reckons that FirstGroup should sell its Greyhound long-distance bus business in the US, list its school bus division and pay down debt. It says this would boost shares to 199p from around 118p now.
The management disagrees. Any potential bidders will probably be put off by £1.4bn of debt and a £220m hole in its pension fund. Can FirstGroup turn itself around?