Investment - Articles - Pensions at the heart of Apollo approach for FirstGroup

 “As with Melrose and GKN this is another example of an iconic British company subject to a takeover bid where pensions are at the absolute heart of whether the deal happens or not.”

 “It is vitally important that shareholders are not the only beneficiaries in these situations; Equitability of treatment is key. Shareholders getting a premium often involves a pension scheme being exposed to greater risk, particularly if it turns out to be a leveraged bid weakening the pension scheme covenant.

 “Pensions Regulation is in the process of being strengthened through the White Paper to reflect this reality but is not there yet. Directors responsibilities have been thrust into the spotlight and they will be aware that their actions will be subject to increased scrutiny. To this end, when deciding whether or not to recommend a takeover proposal they should consider, and crucially show that they have considered, their obligations to the pension schemes alongside shareholders. In the meantime it is incumbent on all stakeholders to work together to ensure an optimal outcome for all.”