Tomkins to hand back further pounds 400m as disposals continue

TOMKINS, the diversified industrial group, yesterday unveiled plans to buy back pounds 400m of its shares and streamline itself further by selling its lawnmower and bicycle division.

The restructuring will leave Tomkins, which is about to fall out of the FTSE 100 index, with total debt of about pounds 600m and three core businesses focusing on the construction, automotive and food sectors.

The buyback will be in the form of a tender offer for 15 per cent of Tomkins's shares priced in a range of 220p to 250p. It follows a series of share repurchases this year totalling pounds 143m. The market gave a lukewarm response to news of the latest buyback, and Tomkins shares fell by 6 per cent to 221.5p.

The two businesses being sold are Murray Inc, the US lawnmower, snowblower and bicycle company that Tomkins bought for $232m 10 years ago, and its UK mowing machinery business Hayter, bought for pounds 4m.

Tomkins has decided not to sell the handgun company Smith & Wesson, which together with the two lawnmower businesses makes up its professional, garden and leisure products division. Tomkins said it did not believe a series of legal actions against Smith & Wesson in the US seeking to hold it responsible for "negligent distribution" would go against the company.

Greg Hutchings, Tomkins chairman, said the group looked at several acquisition opportunities, including one worth more than $2bn (pounds 1.25bn) but had decided to hand capital back to shareholders because none of the deals would have generated sufficient returns.

He said Tomkins would still have the resources to undertake bolt-on acquisitions after the buyback, although not on the scale of 1997 when it spent pounds 741m, including the automotive components maker Stant.

The buyback price represents a premium of at least 7 per cent to Tomkins's closing price last Thursday, the day before it announced its intention to launch a tender offer.

Mr Hutchings would not be drawn on whether Tomkins will further pare its portfolio of businesses. Its other brands include Bisto, Hovis, Lyons Cakes and Trico windscreen wipers. He denied that there was discord among board members over group strategy, but said it was being reviewed regularly.

Outlook, page 17

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower