Acquisition

Released : 09.02.2007

FirstGroup PLC
09 February 2007


This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Canada, South Africa, Australia, Japan
or any jurisdiction in which the same would be unlawful.  This announcement is
not an offer of securities in the United States, Canada, South Africa,
Australia, Japan or any jurisdiction in which the same would be unlawful.

FirstGroup plc
9 February 2007



                 FirstGroup plc ("FirstGroup" or the "Company")

                   Acquisition of Laidlaw International, Inc.






The board of directors of FirstGroup (the "Board") today announces that
FirstGroup has signed an agreement (the "Acquisition Agreement") for the
acquisition of Laidlaw International, Inc. ("Laidlaw") (the "Acquisition") for
$35.25 per ordinary share of Laidlaw in cash, equivalent to a total
consideration of $3.6 billion (£1.9 billion) including the refinancing of
Laidlaw's existing debt.  Upon completion, the Acquisition will create North
America's leading transport services company.  The Acquisition has been
unanimously recommended by the boards of both companies.



The acquisition price of $35.25 per ordinary share of Laidlaw represents a
premium of 11 per cent. to the closing price of an ordinary share of Laidlaw of
$31.72 on 8 February 2007 the last business day before this announcement and the
total consideration of $3.6 billion represents a multiple of 7.7 times the
EBITDA of Laidlaw for the financial year ended August 2006 of $466.3 million.



The Board believes that there are significant strategic and financial benefits
to be gained from the acquisition of Laidlaw in terms of scale, product offering
and position in the North American transport market, as well as an opportunity
to create value through synergies.



Specifically, the Board expects that the Acquisition will:



  • enable FirstGroup to develop further its position in North America,
    consistent with FirstGroup's strategy of growing the earnings of the
    business, inter alia, by selective acquisition
  • provide a strong platform for FirstGroup to derive further economies of
    scale and offer consistent standards of quality and service to customers in
    both the public and private sector in North America
  • generate approximately $70 million of annualised pre-tax cost savings in
    the first full financial year following its completion
  • be earnings enhancing in the first full financial year following its
    completion



The cash consideration for the Acquisition (including the repayment of existing
debt of Laidlaw) of $3.6 billion (£1.9 billion) will be satisfied through a
combination of debt and equity finance.  The debt portion will be financed from
new committed bank debt facilities of $3.75 billion (£2.0 billion).  The equity
portion of approximately $750 million, which is supported by an equity bridge
facility of that amount, will be financed from a placing of new ordinary shares
to raise approximately £200 million announced separately today and a subsequent
equity issue of approximately £175 million which is expected to take place
shortly after completion of the Acquisition.



The Acquisition is conditional upon, amongst other things, the approval of the
shareholders of both FirstGroup and Laidlaw and receipt of necessary anti-trust
approvals in the US.



Further details regarding the Acquisition and Laidlaw are set out in the full
text of the announcement of which this summary forms part.



Martin Gilbert, Chairman of FirstGroup, commented:

"This acquisition marks an important new phase in the development of the group's
business.  As a consequence of the strengthening of our North American
activities, we will create additional value for our shareholders."



Moir Lockhead, Chief Executive of FirstGroup, added:

"FirstGroup's acquisition of Laidlaw will considerably enhance the group's
existing activities in North America, which themselves have grown strongly since
we first invested in the US in 1999.  The improved earnings and strong cashflows
arising from the acquisition will strengthen the Group's position.  FirstGroup
aims to be the leader in delivering safe, reliable, innovative and sustainable
transport services.  We look forward to welcoming our new colleagues in North
America to the Group and working with them to integrate the businesses.  Laidlaw
is an established, well run company that shares our commitment to safety and
delivering high quality services to the customers and the communities we serve."



Kevin Benson, President and Chief Executive Officer of Laidlaw added:

"This transaction represents an excellent opportunity for our employees and
stockholders.  The combination of Laidlaw and FirstGroup will bring together two
well-known brands and two well-respected companies that share a very strong
focus on employee and customer satisfaction.  I am delighted to recommend this
transaction to our stockholders."



An analyst meeting to discuss the Acquisition will be held at 9.00am GMT today
at the offices of JPMorgan Cazenove, 20 Moorgate, London, EC2R 6DA.  An
interview with Moir Lockhead, Chief Executive of FirstGroup plc, can be seen at
www.firstgroup.com and www.cantos.com.



ENQUIRIES:


FirstGroup
Moir Lockhead, Chief Executive                             Tel:            +44 (0) 207 291 0505
Dean Finch, Finance Director                               Tel:            +44 (0) 207 291 0512
Rachael Borthwick, Corporate Communications Director       Tel:            +44 (0) 207 291 0508

JPMorgan Cazenove                                          Tel:            +44 (0) 207 588 2828
(Financial advisers & broker to FirstGroup)
Ian Hannam
Malcolm Moir
Edward Banks

Tricorn Partners                                           Tel:            +44 (0) 207 823 0888
(Financial advisers to FirstGroup)
Justin Dowley

UBS
(Broker to FirstGroup)
Robert Jennings                                            Tel:            +44 (0) 20 7568 2809
Christopher Smith                                          Tel:            +44 (0) 20 7568 4389

Brunswick                                                  Tel:            +44 (0) 207 404 5959
(PR for FirstGroup)
Giles Croot
Craig Breheny

Laidlaw                                                    Tel:            +1 630 848 3120
Kevin Benson, Chief Executive Officer
Sarah Lewensohn, Director, Investor Relations

Morgan Stanley
(Financial advisers to Laidlaw)
William Strong                                             Tel:            +1 312 706 4400
Frank Oelerich                                             Tel:            +1 312 706 4444





JPMorgan Cazenove Limited ("JPMorgan Cazenove"), which is authorised and
regulated in the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser and corporate broker for FirstGroup and no one
else in connection with the Acquisition and will not be responsible to anyone
other than FirstGroup for providing the protections afforded to its clients or
for providing advice in relation to the Acquisition or in relation to the
contents of this announcement, or for any other transaction, arrangement or
matters referred to in this announcement.



Tricorn Partners ("Tricorn"), which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively as financial
adviser for FirstGroup and no one else in connection with the Acquisition and
will not be responsible to anyone other than FirstGroup for providing the
protections afforded to its clients or for providing advice in relation to the
Acquisition or in relation to the contents of this announcement, or for any
other transaction, arrangement or matters referred to in this announcement.



UBS Limited ("UBS") is acting exclusively as corporate broker for FirstGroup and
no one else in connection with the Acquisition and will not be responsible to
anyone other than FirstGroup for providing the protections afforded to its
clients or for providing advice in relation to the Acquisition or in relation to
the contents of this announcement, or for any other transaction, arrangement or
matters referred to in this announcement.



Morgan Stanley & Co. Inc. ("Morgan Stanley") is acting exclusively as financial
adviser to Laidlaw and no one else in connection with the Acquisition and will
not be responsible to anyone other than Laidlaw for providing the protections
afforded to its clients or for providing advice in relation to the Acquisition
or in relation to the contents of this announcement, or for any other
transaction, arrangement or matters referred to in this announcement.



Certain statements in this announcement are forward-looking statements.  Such
statements speak only as at the date of this announcement, are based on current
expectations and beliefs and, by their nature, are subject to a number of known
and unknown risks and uncertainties that could cause actual results and
performance to differ materially from any expected future results or performance
expressed or implied by the forward-looking statement.  The information
contained in this announcement is subject to change without notice and neither
FirstGroup, JPMorgan Cazenove, Tricorn, UBS nor Morgan Stanley assumes any
responsibility or obligation to update publicly or review any of the
forward-looking statements contained herein.



No statement in this announcement is intended to be a profit forecast or to
imply that the earnings of FirstGroup for the current year or future years will
necessarily match or exceed the historical or published earnings of FirstGroup
or Laidlaw.



FirstGroup plc ("FirstGroup" or the "Company")


                   Acquisition of Laidlaw International, Inc.



1.         Introduction



The Board today announces that FirstGroup has signed an Acquisition Agreement
for the acquisition of Laidlaw, the leading operator of school and inter-city
bus transportation and a supplier of public transit services in North America.
Under the terms of the Acquisition Agreement, FirstGroup will pay consideration
of $35.25 per ordinary share of Laidlaw in cash, equivalent to a total
consideration of approximately $3.6 billion (£1.9 billion) including the
refinancing of Laidlaw's existing debt.



2.         Information on Laidlaw



Laidlaw is the leading operator of school and inter-city bus transportation and
a supplier of public transit services in North America.  Laidlaw group
businesses operate recognised brands, including Laidlaw Education Services,
Greyhound Lines and Greyhound Canada ("Greyhound"), and Laidlaw Transit.
Laidlaw's shares trade on the New York Stock Exchange.



For the financial year ended 31 August 2006, Laidlaw had revenues of $3.1
billion (£1.6 billion) and operating profit of $250.5 million (£132 million).
As at 31 August 2006 Laidlaw had gross assets of $3.0 billion (£1.6 billion).



Laidlaw operates in three reportable business segments that provide
transportation services in the United States (approximately 84% of revenue) and
Canada (approximately 16% of revenue):



(i)                 Education Services (approximately 50% of revenue);

(ii)                Greyhound (approximately 40% of revenue); and

(iii)               Public Transit (approximately 10% of revenue).

The Education Services segment ("Education Services") provides school bus
transportation, including scheduled home-to-school, extra-curricular and charter
and transit school bus services, throughout the United States and Canada.
Greyhound, a national provider of inter-city bus transportation in the United
States and Canada, provides scheduled passenger service, package delivery
service and charter bus services.  The Public Transit segment ("Public Transit")
provides fixed-route municipal bus services and paratransit bus transportation
for riders with restricted mobility.  For the year ended 31 August 2006,
approximately 84% and 83% of Laidlaw's revenues and EBITDA, respectively, were
generated in the United States, with the remaining 16% and 17% generated in
Canada.



(i)         Education Services

Laidlaw's Education Services segment is the leading independent school bus
operator in North America.  The segment operates in 37 states in the United
States and 6 provinces in Canada. Headquartered in the Chicago suburb of
Naperville, Education Services operates school buses and special education
vehicles, primarily under the name Laidlaw Education Services in North America.



The Education Services business is composed of three core activities
(home-to-school, extra-curricular and charter & transit) as well as the non-core
activities of equipment leasing, logistical support, maintenance agreements and
other support services.



Education Services has contracts with more than 1,000 school boards and
districts in North America.  Education Services has approximately 450 operating
locations in Canada and the United States, providing transportation for
approximately 2 million students each school day.  The fleet consists of
approximately 41,000 buses.  For the twelve months ended 31 August 2006,
Education Services generated $1.58 billion in revenues and $294.5 million in
EBITDA.



(ii)        Greyhound

Greyhound is the only national provider of scheduled inter-city bus
transportation services in the United States and Canada.  Greyhound's operations
are headquartered in Dallas, Texas.  Greyhound serves the value-oriented
customer by offering scheduled passenger services to approximately 2,400
destinations throughout the United States and Canada, carrying approximately 24
million passengers annually.  Greyhound also provides package express services
and charter bus services.  For the twelve months ended 31 August 2006, Greyhound
generated $1.24 billion in revenue and $152.1 million in EBITDA.



(iii)       Public Transit

Laidlaw's Public Transit business is a leading private provider of municipal
public transportation services in North America, specialising in paratransit
(transportation for mobility-challenged individuals) and fixed-route (municipal
transit) contract services.  Headquartered in Overland Park, Kansas, the segment
operates under the name Laidlaw Transit Services.  Laidlaw Transit Services also
operates under the name SafeRide Services in Phoenix, Arizona.  Revenue is
mainly driven by contracts with regional and municipal transit authorities.  As
of 31 August 2006, Public Transit had nearly 130 municipal transit and
paratransit contracts, involving 40 million passengers carried annually, and a
fleet of approximately 3,400 vehicles, approximately 71% of which are client
owned.  For the twelve months ended 31 August 2006, Public Transit generated
$308.2 million in revenues and $19.7 million in EBITDA.



Public Transit operates at approximately 88 locations in 23 states and
transports more than 40 million passengers per year.



3.         Background to and reasons for the Acquisition



FirstGroup's strategy is to maintain and develop its role as a leading global
transport provider.  It has pursued, for some years, a strategy of improving
shareholder returns through organic growth and by selective acquisitions in the
UK and North America.  The Acquisition is consistent with this strategy and is
expected to be earnings enhancing in the first full financial year following
completion.



a) Background



In 1999, as part of its strategy to develop profitably its business outside the
UK, FirstGroup acquired the US based Ryder Public Transportation Services, Inc.
("Ryder"), a business primarily involved in student transportation but also
involved in transit contracting and management and fleet maintenance and
ancillary services.  This represented FirstGroup's first large US investment.



FirstGroup has successfully integrated Ryder, and grown its business in North
America (both organically and by acquisition) from a turnover of $683 million,
in its first full financial year of operations, to a business which reported
turnover of $1,476 million in the year ended 31 March 2006, and which has
continued to grow since then.  Over the period since 1999 FirstGroup has built a
very experienced US management team.



The US school bus market is highly fragmented, with bus services predominantly
run by school boards.  The Board estimates that of the 500,000 school buses in
North America, approximately 350,000 are in the public sector and are still the
direct responsibility of, and are operated by, the school district authorities.



FirstGroup's involvement in the US transit market consists largely of "Fixed
Route" contracts to operate and manage urban bus services on behalf of state
transit authorities and "Paratransit" services contracts to provide transport
for passengers with restricted mobility and manage call centre operations for
these services.  The combined Fixed Route and Paratransit markets are estimated
to be worth approximately $15 billion, of which some $13 billion is in the
public sector and some $2 billion in the outsourced private sector.



b) Strategic rationale



The Board believes that, in bringing together FirstGroup and Laidlaw, it will
create a stronger, more robust business, in what is still a fragmented market,
that is capable of growing its earnings through improved operating efficiencies
and the extraction of substantial synergies.  The enlarged group will be able to
improve its margin whilst being significantly cash generative.



More specifically, FirstGroup is familiar with the school bus and transit
markets in which Laidlaw operates and has followed Laidlaw in an acquisition
context for over two years.  The Board of FirstGroup views the business as
extremely attractive and will bring to FirstGroup:



1)      Proven operations with respected management;

2)      Diversified contract-backed revenues with over 1,400 contracts;

3)      Established and tightly controlled cost base;

4)      Healthy, organic growth opportunities; and

5)      Strong cash generation, enabling the group to reduce leverage quickly.



The Acquisition will be transformational in terms of developing FirstGroup's
position in the North American transportation market. The combined business will
employ over 98,000 staff in North America.



In the North American school bus market, the lower cost base will enable the
enlarged group to bid for contracts more effectively and the Board of FirstGroup
believes that its enhanced service offering will benefit both the customers and
the Company.  It will also give FirstGroup the opportunity to work more
effectively with those school districts which continue to run their own buses,
by offering them a greater range of services bringing more operational and cost
efficiencies. The combined business will operate approximately 63,000 school
buses in the US and Canada.  It will employ over 71,000 staff in North America.



Since the acquisition of Ryder, FirstGroup has grown strongly in the transit
contracting and management markets.  FirstGroup's transit business has
successfully expanded in the higher margin, faster growing call centre,
paratransit, logistics consultancy and public/private shuttle bus markets.  The
Acquisition will provide a strong platform for FirstGroup to offer further
economies of scale and importantly consistent standards of quality and service
to its customers in both the public and private sector.  The combined business
will employ over 12,000 staff in the US and Canada.



FirstGroup considers Greyhound to be an attractive business with exciting growth
prospects and strong brand.  Greyhound has a well-respected management team, who
have re-shaped the business in the last two years through network
rationalisation.  Greyhound is the only national provider of scheduled intercity
bus services in the US and Canada, employing over 11,000 staff, and is a
credible competitor to many other forms of mid to long distance transport.
FirstGroup's management believes there is further scope to enhance revenues
through yield management systems, improved revenue collection and optimisation.
 In addition, FirstGroup believes that Greyhound's marketing offering is
relatively under-developed and as a consequence there is significant scope to
drive revenue growth, for example from longer term bookings.



However, Greyhound is a less obvious strategic fit with the rest of FirstGroup's
current business.  The Board of FirstGroup will therefore be carrying out a
strategic review of Greyhound.



c) Financial effects of the acquisition



The Acquisition will bring significant savings in both operating costs and
capital expenditure.  FirstGroup estimates annual cost synergies to be
approximately $70 million in the first full financial year of ownership.  The
savings will be achieved through:



1)      rationalisation of the network and removal of overlapping operations;

2)      removal of excess spare fleet;

3)      reduction in equipment stock, such as spares;

4)      sale of excess owned properties;

5)      purchasing improvements;

6)      reduced insurance costs; and

7)      removal of North American board costs and central overheads.



These savings will enable FirstGroup to drive margin improvements in both
Laidlaw and FirstGroup's existing US businesses.  FirstGroup should also be able
to benefit from significant tax losses and other tax attributes within Laidlaw
to reduce the amount of cash tax payable by the combined business.



The potential savings described above are expected to make the Acquisition
earnings enhancing in the first full financial year of ownership.



The integration of Laidlaw into FirstGroup's existing business will be overseen
by Dean Finch, Group Finance Director.  David Leeder, Director of International
Development and Marketing, will assume responsibility for Greyhound.



The cash consideration for the Acquisition, including the refinancing of
Laidlaw's existing debt, is approximately $3.6 billion (£1.9 billion).  This
will be financed through new committed bank debt facilities of $3.75 billion
(£2.0 billion) and equity issues of approximately £375 million, including the
£200 million placing announced separately today.  More details of the financing
structure are given in paragraph 6 below.



The combined FirstGroup and Laidlaw will have strong cashflows and FirstGroup
has designed the financing structure to enhance shareholder value through an
efficient use of its balance sheet to minimise the amount of equity to be issued
to finance the Acquisition, whilst maintaining a prudent overall capital
structure consistent with investment grade status. The strong cashflows from the
combined business should enable FirstGroup to rapidly reduce debt levels over
the next few years.



4.         Details of the Acquisition



Under the terms of the Acquisition Agreement, FirstGroup has agreed to acquire
Laidlaw by way of a merger of Fern Acquisition Vehicle Corporation (a newly
incorporated Delaware Corporation and a wholly-owned subsidiary of FirstGroup)
with and into Laidlaw (as a result of which each issued and outstanding share of
common stock of Laidlaw will be converted into a right to receive $35.25 in
cash).  Pursuant to such merger, on completion of the Acquisition, Laidlaw will
become one of the Company's wholly-owned subsidiaries.



Based on the total issued and outstanding share capital of Laidlaw at the date
of this announcement of 81.7 million ordinary shares, including the cashing out
of Laidlaw option holders, the total consideration payable by FirstGroup to
Laidlaw shareholders will be approximately $2.9 billion.



The Acquisition Agreement contains various representations and warranties
customary for a US acquisition of the size and nature of the Acquisition.  The
representations and warranties from Laidlaw to FirstGroup cover, amongst other
things, the organisation and capital of Laidlaw and its subsidiaries, the due
and valid execution of the Acquisition Agreement and the absence of certain
events and liabilities which could be expected to have a material adverse effect
on Laidlaw's financial condition or business or on Laidlaw's ability to
consummate the transaction.  The representations and warranties from FirstGroup
to Laidlaw cover, amongst other things, the due and valid execution of the
Acquisition Agreement.



The Acquisition Agreement is conditional upon, amongst other things: (i) the
waiting period applicable to the consummation of the Acquisition under the
Hart-Scott-Rodino ('HSR') Act having expired, been terminated or been waived and
approval having been obtained under the Competition Act (Canada), (ii) the
approval of the Acquisition Agreement and the transactions contemplated thereby
by Laidlaw shareholders at a special shareholder meeting of Laidlaw; and (iii)
the approval of the Acquisition Agreement and the transactions contemplated
thereby by FirstGroup shareholders at a general meeting of FirstGroup (the "EGM
").  Although the Board is confident that the regulatory conditions referred to
above will be satisfied, there can be no assurance as to the timing or outcome
of the HSR or other necessary clearance processes or that such clearances will
not be subject to conditions, including the giving of certain undertakings (for
example, as to divestments) by FirstGroup.



Either FirstGroup or Laidlaw may terminate the Acquisition Agreement if, amongst
other things, the merger has not been consummated on or before 8 August 2007;
provided that either FirstGroup or Laidlaw may unilaterally extend such date for
up to three months if completion of the Acquisition is prevented only by the
requirement to obtain the necessary competition clearances.



The Board currently expects that completion of the Acquisition will take place
later this year.



Further details of the principal terms and conditions of the Acquisition
Agreement will be set out in a circular to be sent to FirstGroup shareholders
seeking approval of the Acquisition and giving notice of the EGM (the "Circular
").



5.         Break fees



The Acquisition Agreement provides for the payment of certain fees and expenses
by FirstGroup and Laidlaw to each other in certain circumstances in the event
that the Acquisition should not be completed.



Laidlaw has agreed to pay to FirstGroup a break fee of up to $78 million in
certain circumstances. FirstGroup has agreed to pay Laidlaw a break fee of up to
$43.35 million in certain circumstances.



Further details of these arrangements will be set out in the Circular.



6.         Financing of the Transaction



The cash consideration for the Acquisition, including the refinancing of
Laidlaw's existing debt, is expected to be approximately $3.6 billion (£1.9
billion).  This will be financed through new committed bank facilities of $3.75
billion (£2.0 billion) and equity issues of approximately £375 million,
including the £200 million placing announced separately today. In addition
FirstGroup expects to replace certain letters of credit and other facilities of
Laidlaw.



The equity financing of approximately £375 million is expected to comprise the
placing announced separately today of approximately £200 million and a further
equity issue of approximately £175 million shortly after completion of the
Acquisition.  The full amount of the equity required has been underwritten
pursuant to a standby equity underwriting agreement and to the extent that any
such equity has not been issued prior to completion, the funds to complete the
Acquisition will be available through a subordinated equity bridge facility of
$750 million.



a) Committed Debt Facilities and Standby Underwriting



The committed bank debt facilities comprise the following facilities entered
into today by FirstGroup:



•        a senior loan facility (the "Senior Facility") comprising two tranches
(a term facility and a revolving credit facility) in an aggregate amount of
$3.75 billion entered into with HSBC Bank plc, J.P. Morgan Chase Bank, N.A. and
The Royal Bank of Scotland plc; and

•        a subordinated equity bridge facility (the "Equity Bridge Facility") in
an amount of $750 million entered into with J.P. Morgan Chase Bank, N.A..

The Equity Bridge Facility will be reduced by the amount of any equity issue
effected by FirstGroup, including the placing.  To the extent that any part of
the Equity Bridge Facility is drawn down at completion of the Acquisition,
FirstGroup intends to refinance it through an equity issue shortly after
completion. FirstGroup has entered into a standby equity underwriting agreement
(the "Standby Equity Underwriting Agreement") with JPMorgan Cazenove and J.P.
Morgan Securities Limited ("JPMSL") (JPMorgan Cazenove together with JPMSL, the
"Underwriters").  The Standby Equity Underwriting Agreement includes an
undertaking from FirstGroup to refinance the Equity Bridge Facility by means of
an equity offering as soon as reasonably practicable following the consummation
of the Acquisition.  Although the price at which any new ordinary shares of
FirstGroup are to be issued will be determined by FirstGroup and the
Underwriters at the time of issue, the Standby Equity Underwriting Agreement
nevertheless includes a commitment from the Underwriters to underwrite any such
issue at a price not to be less than the nominal value of each new ordinary
share.  The parties further undertake to cooperate in the negotiation of the
underwriting arrangements relating to any specific offering.



Further details of the Senior Facility, the Equity Bridge Facility and the
Standby Underwriting Agreement will be set out in the Circular.



b) Placing of new Ordinary Shares



FirstGroup has today also announced a bookbuilt, non pre-emptive placing (the "
Placing") of up to 39,527,477 new ordinary shares (the "Placing Shares") to
raise approximately £200 million.  The Placing is not conditional on the
completion of the Acquisition.  The Placing Shares are being placed, subject to
the terms and conditions of a placing agreement entered into today between
FirstGroup, JPMorgan Cazenove, JPMSL and UBS, at a price (the "Placing Price")
to be agreed by JPMorgan Cazenove, JPMSL and FirstGroup at the close of the
bookbuilding process.  The Placing Shares will represent a maximum of
approximately 9.99 per cent. of FirstGroup's current issued share capital.



If the Acquisition does not complete, FirstGroup will use the monies raised in
the Placing for potential investment opportunities in Continental Europe, or
general corporate purposes in the UK and US.



7.         Current trading and prospects



a) FirstGroup



Commenting on the interim results announced on the 8 November 2006, FirstGroup's
Chief Executive, Moir Lockhead said:



"I believe the Group is well placed for continued growth during the second half
of the year.  The Group's clear strategy is to increase shareholder value by
profitably growing our core businesses and developing opportunities in new
markets.  The Board remains confident of the Group's future prospects and
ability to generate strong cash flows and is committed to dividend growth of 10
per cent. per annum, for the foreseeable future at least until 2008, and where
appropriate share repurchases while maintaining a strong balance sheet.  Trading
in the second half of the year has started well and is in line with our
expectations."



b) The Enlarged Group



The Board believes that, following completion of the Acquisition, the enlarged
group will be well placed to continue to develop its leading position in the
large, fragmented North American transport market. The Board has confidence in
the financial and trading prospects of the enlarged group for the current and
next financial years, much of which will be spent in integrating and
assimilating Laidlaw and FirstGroup's North American operations and on the
delivery of synergies, to realise the cost savings and operational benefits
outlined above.



8.         Shareholder circular and outline timetable

FirstGroup intends to despatch the Circular to FirstGroup shareholders giving
full details of the Acquisition, and including notice of the EGM, in March.  The
Board expects separate meetings of FirstGroup shareholders and Laidlaw
shareholders to take place during April with completion of the Acquisition,
subject to satisfaction of the conditions outlined above, expected later this
year.

This announcement assumes throughout an $:£ exchange rate of 1.90.

ENQUIRIES:
FirstGroup
Moir Lockhead, Chief Executive                             Tel:            +44 (0) 207 291 0505
Dean Finch, Finance Director                               Tel:            +44 (0) 207 291 0512
Rachael Borthwick, Corporate Communications Director       Tel:            +44 (0) 207 291 0508

JPMorgan Cazenove                                          Tel:            +44 (0) 207 588 2828
(Financial advisers & broker to FirstGroup)
Ian Hannam
Malcolm Moir
Edward Banks

Tricorn Partners                                           Tel:            +44 (0) 207 823 0888
(Financial advisers to FirstGroup)
Justin Dowley

UBS
(Broker to FirstGroup)
Robert Jennings                                            Tel:            +44 (0) 20 7568 2809
Christopher Smith                                          Tel:            +44 (0) 20 7568 4389

Brunswick                                                  Tel:            +44 (0) 207 404 5959
(PR for FirstGroup)
Giles Croot
Craig Breheny

Laidlaw                                                    Tel:            +1 630 848 3120
Kevin Benson, Chief Executive Officer
Sarah Lewensohn, Director, Investor Relations

Morgan Stanley
(Financial advisers to Laidlaw)
William Strong                                             Tel:            +1 312 706 4400
Frank Oelerich                                             Tel:            +1 312 706 4444



JPMorgan Cazenove Limited ("JPMorgan Cazenove"), which is authorised and
regulated in the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser and corporate broker for FirstGroup and no one
else in connection with the Acquisition and will not be responsible to anyone
other than FirstGroup for providing the protections afforded to its clients or
for providing advice in relation to the Acquisition or in relation to the
contents of this announcement, or for any other transaction, arrangement or
matters referred to in this announcement.



Tricorn Partners ("Tricorn"), which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively as financial
adviser for FirstGroup and no one else in connection with the Acquisition and
will not be responsible to anyone other than FirstGroup for providing the
protections afforded to its clients or for providing advice in relation to the
Acquisition or in relation to the contents of this announcement, or for any
other transaction, arrangement or matters referred to in this announcement.



UBS Limited ("UBS") is acting exclusively as corporate broker for FirstGroup and
no one else in connection with the Acquisition and will not be responsible to
anyone other than FirstGroup for providing the protections afforded to its
clients or for providing advice in relation to the Acquisition or in relation to
the contents of this announcement, or for any other transaction, arrangement or
matters referred to in this announcement.



Morgan Stanley & Co. Inc. ("Morgan Stanley") is acting exclusively as financial
adviser to Laidlaw and no one else in connection with the Acquisition and will
not be responsible to anyone other than Laidlaw for providing the protections
afforded to its clients or for providing advice in relation to the Acquisition
or in relation to the contents of this announcement, or for any other
transaction, arrangement or matters referred to in this announcement.



Certain statements in this announcement are forward-looking statements.  Such
statements speak only as at the date of this announcement, are based on current
expectations and beliefs and, by their nature, are subject to a number of known
and unknown risks and uncertainties that could cause actual results and
performance to differ materially from any expected future results or performance
expressed or implied by the forward-looking statement.  The information
contained in this announcement is subject to change without notice and neither
FirstGroup, JPMorgan Cazenove, Tricorn, UBS nor Morgan Stanley assumes any
responsibility or obligation to update publicly or review any of the
forward-looking statements contained herein.



No statement in this announcement is intended to be a profit forecast or to
imply that the earnings of FirstGroup for the current year or future years will
necessarily match or exceed the historical or published earnings of FirstGroup
or Laidlaw.


                      This information is provided by RNS
            The company news service from the London Stock Exchange