(Bloomberg) -- One of FirstGroup Plc’s largest investors called for the bus and rail operator to implement measures to improve its performance, including reinstating a dividend and splitting its U.K. and North American assets.

“FirstGroup in its current guise is designed for failure -- your 10 years of extraordinary underperformance are proof enough of that,” James Rasteh, founder of Coast Capital, wrote in a letter to the company’s chairman.

Coast Capital, which says it is a top five holder in the Aberdeen, Scotland-based company, also wants FirstGroup to replace the majority of its board, consult shareholders on hiring a new chief executive officer and other managers and launch a sale-and-leaseback on at least some operating assets in its student bus business.

“We have collectively compromised too much, for too long, to now settle for half-way solutions,” Rasteh wrote in the letter dated Nov. 6, while also claiming that other investors have the same opinion.

A representative for FirstGroup didn’t immediately respond to requests for comment.

Shares in FirstGroup have fallen about 28 percent this year amid poorly performing U.K rail lines and increased competition from low-cost carriers. The company, which operates brands including Greyhound buses, First Rail and First Student, kicked off a review of its operations in May after CEO Tim O’Toole resigned.

Wolfhart Hauser, FirstGroup’s chairman, said at the time the company remains open to takeover bids despite rejecting an offer from Apollo Global Management LLC. FirstGroup, which has a market valuation of about 982 million pounds ($1.3 billion), also attracted interest from buyout firms including CVC Capital Partners, people familiar with the matter said in September.

Coast Capital has consulted “every CEO in the industry” as well as severally former FirstGroup managers in devising its proposals for the company, according to the letter. It has also submitted the names of potential director nominees, none of whom have been contacted by the company, Rasteh said.

It’s not the first time FirstGroup has been targeted by an activist who wanted to split the company. Sandell Asset Management ran an unsuccessful campaign to break up the company in 2013.

Coast Capital is also waging an activist campaign at Canadian miner Detour Gold Corp., where it has urged the company to explore a sale.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Ben Scent

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