Bus and rail company FirstGroup has rejected a takeover approach from the American private equity group Apollo, the British transport operator has announced.

After shares rose more than 7% during trading on Wednesday amid rumours of a takeover bid, the board of FirstGroup issued a statement confirming an initial proposal had been made by Apollo Management but had been unanimously rejected, dismissing it as “opportunistic”.

The Aberdeen-based company, which runs several well-known travel operations, including Great Western railways, the American Greyhound Bus brand and First Bus, said the proposal was “preliminary and highly conditional”. The board said it rebuffed the approach because it “fundamentally undervalues” FirstGroup and is “opportunistic in nature.”

“There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made. A further announcement will be made in due course if and when appropriate,” the FirstGroup board said in a statement.

Under the UK’s takeover rules, Apollo Management has until 9 May to clarify its intention to make an offer.

Last year, Apollo raised the largest private equity fund in history, totalling $24.6 billion earmarked for investments in the US, Canada and Western Europe.

FirstGroup was founded in 1995 through a merger of Badgerline and GRT Bus Group, growing into an international company with several rail and bus operations in the UK, Ireland, Canada and the United States. The firm now has around 100,000 employees and is listed on the London Stock Exchange, forming part of the FTSE 250 index.

The FirstGroup stock price had slipped since the start of the year amid Brexit concerns. Last summer the bus and train operator warned that its UK business was likely to be hit by falling consumer confidence following the decision to leave the EU.