First Group falls after I Squared says it will not table a firm offer

That followed an earlier announcement from I Squared Capital Advisors that it would not proceed with a firm offer.

According to First Group, its board had decided that the cash component of I Squared's proposed takeover offer "significantly undervalues FirstGroup's continuing operations and its future prospects".

Similarly, the company added that "the contingent value does not provide shareholders with sufficient certainty."

On 15 August, I Squared had tabled a bid of 135.0p per First Group share with additional contingent value from the First Transit earnout.

Under Rule 2.8 of the City Code on Takeovers and Mergers, I Squared would now be barred from being able to table another bid for six months.

FirstGroup also said that in was in a robust position to capitalise on organic and non-organic growth opportunities and that there was further scope to realise value from its non-core businesses, including its legacy Greyhound assets and the value of the FirstTransit earnout.

It was also continuing to make progress towards its 10% target for margins, as well as increasing passenger volume and yield growth and was well placed to benefit from the more than £1bn of funds announced by government under its National Bus Strategy.

As of 1608 BST, shares of First Group were falling 10.94% to 114.80p.