NEWS

Melrose Industries completes sale of Elster business to Honeywell International

Wednesday, Dec 30, 2015

Melrose Industries PLC ("Melrose") is pleased to announce the completion of the £3.3 billion disposal of its Elster business to Honeywell International Inc. and the proposed return of approximately £2.4 billion in cash to shareholders, equivalent to 240 pence per ordinary share.

On 6 October 2015, in accordance with its strategy to return value to shareholders, Melrose announced its intention to return a large part of the net sale proceeds from the disposal to Shareholders soon after completion and to carry out an associated Share Capital Consolidation. All resolutions in relation to the Proposed Return of Capital were passed by Shareholders earlier this year and the Board considers it to be in the best interests of Shareholders to effect the Proposed Return of Capital and to carry out the Share Capital Consolidation. The aim of the Share Capital Consolidation is to ensure, so far as possible, the market price of an ordinary share remains approximately the same before and after the Proposed Return of Capital and to maintain comparability of historical and future per share data.

The balance of the net proceeds has been used largely to pay down existing borrowings.

Christopher Miller, Chairman of Melrose, commented:

"With this latest return of capital, Melrose will have given back to investors approximately £4.3 billion in cash since our first acquisition in 2005, which is an outstanding outcome for shareholders and a further demonstration of the success of the Melrose "buy, improve, sell" model.  We are optimistic that a suitable acquisition will be identified to bring additional shareholder value and we look forward to inviting investors to participate in this next project in due course. "

Following the Proposed Return of Capital, Melrose will have, since flotation on AIM in 2003:

  • •    raised approximately £2.0 billion from shareholders
  • •    returned in cash approximately £4.3 billion to shareholders
  • •    provided a total shareholder return of 502 per cent., which compares to 148 per cent. for the FTSE350 index for the same period
  • •    created net shareholder value of approximate £2.8 billion including shareholders existing investment in Melrose
  • •    created in Melrose an investment vehicle with the track record and support to continue to implement its successful business model of "buy, improve and sell"
     

Further details on the Proposed Return of Capital

The Proposed Return of Capital will require two court hearings, but no further general meeting of the shareholders of Melrose. No further shareholder action is required in relation to the Proposed Return of Capital or the Share Capital Consolidation.

Under the Proposed Return of Capital and associated Share Capital Consolidation, Shareholders will receive one B Share with a value of 240 pence for every ordinary share held on the record date for entitlement to B Shares as set out in the expected timetable below. The B Shares will not be admitted to listing or dealing on any exchange. It is a condition of the issue of the B Shares that no share certificates will be issued with respect to such B Shares and no CREST accounts will be credited with such B Shares.

It is expected that Shareholders who are entitled to the B Share Entitlement will have such B Shares cancelled by the Court on 27 January 2016. Cheques representing the Nominal Value of the B Shares (240 pence) will be despatched or CREST accounts credited with the proceeds, as appropriate, in respect of such B shares on 5 February 2016 (or such other date as the Directors may determine).

The ordinary share capital will then be consolidated in order to reduce the number of issued ordinary shares to reflect the return to Shareholders. The Share Capital Consolidation will reduce the number of ordinary shares in Melrose which Shareholders own, but not the proportion (subject to allowance for fractional entitlements). The aim of this is to ensure, so far as possible, the market price of an ordinary share following the Share Capital Consolidation (the "New Ordinary Shares") remains approximately the same before and after the Proposed Return of Capital and to maintain comparability of historical and future per share data.

 

melroseplc.net

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