{
  "docId": "019dd923-622b-71dc-a6db-e6b6bb0421c6",
  "docSlug": "e9bc06261f48",
  "documentTitle": "FirstGroup plc (FGP)",
  "authorId": "08_Sandell",
  "authorName": "Sandell Asset Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2014-01-15 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.4145161,
  "pageNumber": 26,
  "pageCount": 56,
  "prevPage": 25,
  "nextPage": 27,
  "slideType": "valuation_table",
  "function": "quantify_opportunity",
  "density": "dense",
  "nDataPoints": 7,
  "notes": "The table compares the cost of debt retirement (Total Cash Spent) against the NPV of future interest savings.",
  "elementsJson": [
    "headline_text",
    "bullet_list",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622b-71dc-a6db-e6b6bb0421c6/26",
  "deckHref": "/decks/019dd923-622b-71dc-a6db-e6b6bb0421c6",
  "deckJsonHref": "/decks/019dd923-622b-71dc-a6db-e6b6bb0421c6.json",
  "deckAnchorHref": "/decks/019dd923-622b-71dc-a6db-e6b6bb0421c6#slide-26",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Due to favourable market conditions today, we believe that interest expense savings would more than offset the additional upfront costs of redeeming or repurchasing the existing bonds",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-5375-7572-b86d-fe44a3155dbf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.95,
        "x": 0.03,
        "y": 0.86
      },
      "kind": "disclaimer",
      "text": "Source: Company filings, broker research, Sandell estimates (as included in slide 36), Bloomberg. (1) Sandell estimates. (2) We currently assume the Company’s Fixed Rate Senior Loan Notes will also be repaid... (3) Discount rate is not based on the Company’s cost of equity or debt...",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ef397f14-f519-4807-b17c-c028e956b28b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.95,
        "x": 0.03,
        "y": 0.19
      },
      "kind": "list",
      "text": "Under the Sandell Plan, the Company would redeem or repurchase debt now despite the premium payable (the “make-whole premium”) in order to safeguard the future. Due to favourable market conditions today, we believe that interest expense savings would more than offset the additional upfront costs of redeeming or repurchasing the existing bonds.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "037723f6-0f8e-4497-b6c3-89b469b77dd4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.95,
        "x": 0.03,
        "y": 0.33
      },
      "kind": "list",
      "text": "Paying back a significant portion of the Company’s debt will right-size its capital structure. High fixed interest rate payments risk incentivising Management to bid uneconomically for short-term cash flow at significant long-term risk to shareholders, especially since Management owns very little stock. A right-sized capital structure and improved incentives are crucial especially in the context of the upcoming rail franchise bids.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7696b985-7bf7-4c78-9657-f0662710134f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "NPV of Savings: £269",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-5375-7572-b86e-027eace03e22",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.74,
        "x": 0.13,
        "y": 0.47
      },
      "kind": "table",
      "text": "Interest Savings vs. Make-Whole Premium (1). Total Debt Retired £1,022. Total Cash Spent £1,242. Value Leakage £220. % Leakage 17.7%. Annual Interest Savings £65. Annual Bond Interest Savings £61. NPV of Savings discounted at 10% £269.",
      "attrs": null,
      "subkind": "valuation",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a7dc9b64-ea08-42b5-903f-58ee9f447355",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.45,
        "x": 0.03,
        "y": 0.14
      },
      "kind": "title",
      "text": "Operational benefits: reduce debt and interest expense",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ae4e1f0f-0f85-4a88-a5c2-ad09daeb3fd6",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}