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Dec 12 2013 | 10:57am ET
Sandell Asset Management is not taking "no" for an answer from British transportation company FirstGroup.
The U.S. hedge fund earlier this week called for FirstGroup to sell iconic bus company Greyhound Lines, a demand rejected by the company. Now, Sandell is upping the ante, seeking the sale of both Greyhound and FirstGroup's yellow school bus business in the U.S. Both companies were formerly owned by Laidlaw International, which FirstGroup acquired in 2007.
Sandell says that spinning off and listing the business could bring investors a 50% return and would give FirstGroup the money it needs to invest in its British rail and bus operations.
"FirstGroup can turn around its historic poor performance by focusing on its U.K. rail and bus businesses," Sandell CEO Tom Sandell said. Sandell owns 3% of FirstGroup.
"The group has engaged with Sandell several times, reviewed their proposal in detail, and believes that it is not compelling and contains a number of structural flaws and inaccuracies," FirstGroup shot back.