Tomkins to hand back further pounds 400m as disposals continue
Tuesday 16 March 1999
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
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...