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
  • Get to the point
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

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss