School buses are seen parked at First Student Charter Bus Rental in San Francisco, California, U.S. April 7, 2020. REUTERS/Stephen Lam//File Photo

(Reuters) – A majority of FirstGroup shareholders on Thursday backed the firm’s planned 3.3 billion pound sale of its U.S. assets to EQT Infrastructure, in a blow to activist investor Coast Capital which led a rebellion against the deal.

Top investor Coast launched a campaign a couple of weeks ago to reject the agreement with Swedish private equity fund EQT, arguing it undervalued the units, and demanded FirstGroup give more of the proceeds to shareholders.

FirstGroup, which aims to focus on its British bus and train operations, was planning to use most of the sale proceeds to pay down debt and contribute to its UK pension schemes, while giving 365 million pounds to shareholders.

“I and the whole Board take very seriously our responsibility to understand the different views and perspectives of investors, and recognise that a number of shareholders did not vote in favour of today’s resolution,” said Chairman David Martin.

The public transport company plans to convene a general meeting, if necessary, after the deal closes to seek investors’ approval over the proposed return of value to shareholders.

The company, which expects the deal to close in the second half of the year subject to certain conditions, said 61.3% of votes cast at the shareholder meeting were in favour of the proposed sale of FirstStudent and FirstTransit. It needed the support of at least half of all votes cast to go through.

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