Newman Tonks lashes out at the big sellers

Newman Tonks, the Birmingham-based door knobs, locks and handles group, yesterday attacked the decision of its biggest shareholder to immediately back the hostile pounds 196m offer made earlier this week from FKI, the acquisitive engineering group.

M&G, Newman Tonks' biggest shareholder with an 11.2 per cent stake, irrevocably accepted FKI's offer on the day the bid was launched while Britannic Assurance, another institutional investor, also pledged its 2.2 per cent stake.

The move was unusual because M&G, which said Newman Tonks had "demonstrably underperformed", tends to back incumbent management.

But in his first response, Geoff Gahan, Newman Tonks' chief executive, queried the fund manager's decision: "I find their behaviour quite strange. Why didn't they sell their stake when the share price was higher earlier this year? They have never forgiven us for realigning [cutting] the dividend four years ago."

Mr Gahan was speaking after Newman Tonks announced the sale of its 33 per cent minority interest in Tesa, its Spanish security products manufacturer to Williams, the diversified industrial group, for pounds 27m. The deal, which is subject to shareholders' approval unless FKI's offer lapses, reduces Newman Tonks' gearing to about 10 per cent.

"We are deploying financial resources away from areas not considered hard core and concentrating on controlling interests in businesses with potential for strong growth in international markets," Mr Gahan said. But he declined to say whether other deals were in the pipeline as part of Newman Tonks' bid defence. Last night FKI posted its offer document to Newman Tonks' shareholders, a move that sets the 60-day bid timetable clock ticking.

FKI urged shareholders to "exit a business with a dismal track record at a significant premium" and to "participate in a business with a strong management team and a proven track record".

Halifax-based FKI is offering a mixture of cash and shares worth 150p, or pounds 196m, and a 140p cash alternative. FKI says it is offering at least 20 times the consensus forecast earnings for Newman Tonks this year.

The offer is being funded by a fully underwritten conditional rights issue of two new FKI shares for every 13 existing shares held at 175p to raise pounds 152m. The rest of the deal will be funded from internal resources, taking FKI's gearing up from more than 60 per cent to 80 per cent.

Newman Tonks is FKI's first hostile takeover. In his letter to shareholders, Jeff Whalley, FKI's chairman, said he had approached Newman Tonks' board with a view to making a recommended offer but had been unable to establish a meaningful dialogue.

Mr Gahan dismissed FKI's latest move. "There is nothing new in the document which only confirms their derisory offer.It will be a long hard battle."

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living