AN INVESTOR pushing for change at FirstGroup will try to sell his breakup plan to other shareholders this week, paving the way for a heated capital markets day later in the month. Thomas Sandell , whose hedge fund revealed a three per cent stake in FirstGroup in November, will this week be in London to set out his proposals for the transport firm to major investors. Last month, Sandell Asset Management called publically for First to spin off its US operations, following talks behind the scenes that failed to persuade management of the plan's benefits. Sandell wants First to sell its yellow school buses and the coach business Greyhound in order to strengthen its balance sheet. "We believe there is strong shareholder support for our ideas and this belief has been reinforced since our engagement with management became public," said Sandell yester-day, adding that its plan "should provide a contingency should the company's turnaround fail to materialise in the anticipated timeframe". First completed a £615m discounted rights issue last summer and axed its dividend in a bid to defend its credit rating following the £2bn purchase of Laidlaw and the suspension of the UK rail franchise contests. The FTSE 250 group has responded coolly to Sandell's proposal. In December it said that while it was "open to all means of enhancing long-term value", the scheme set out by Sandell had "structural flaws". Sandell Asset Management is expected to send a representative to First's capital markets day on 23 January, when new chairman John McFarlane will update investors on the company's turnaround plans. Shares in FirstGroup have gained more than 17 per cent since Sandell declared his holding in November, though Friday's close of 136p is far below the 199p that the hedge fund boss believes they would be worth under his plan.
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