FirstGroup has been granted an extension to a deadline to consider a £1.2 billion offer from private equity company I Squared Capital Advisors.

An initial deadline of 5pm today has been extended to 5pm on 21 July when the suitor must make its intentions known.

Earlier this month the board declared that the cash component of 118p per share “significantly undervalues” its continuing operations and its future prospects, while the additional 45.6p per share “does not provide shareholders with sufficient certainty”.

Russ Mould of AJ Bell said the split offer was “not attractive to shareholders as there is uncertainty over how much they would get, given one component is dependent on the outcome of various factors.

“Furthermore, FirstGroup doesn’t think the main cash component is generous enough.”

The  Aberdeen-based business operates a series of bus franchises around the UK in addition to the rail services Avanti West Coast, Great Western Railway, South Western Railway and TransPennine Express.