Melrose to return between £2bn and £2.5bn to shareholders

WARWICKSHIRE turnaround specialist Melrose Industries has said it intends to return between £2bn and £2.5bn to shareholders following the sale of its Elster subsidiary.

The move is in accordance with the Alcester firm’s “buy, improve, sell” business model.

Melrose announced in July that it had concluded a deal to sell the Elster Group business to Honeywell International for £3.3bn. It was approved by shareholders in August.

Now the company has said it is to implement a corporate reorganisation in order to “efficiently and promptly” return the proceeds of the disposal to shareholders.

It said this corporate reorganisation follows a similar process to the one implemented in 2012 and reflects the significantly larger quantum of the proposed return of capital which is to occur following completion of the sale of Elster, a world leader in measuring and improving the flow of natural gas, electricity and water.
 
Christopher Miller, chairman of Melrose, said: “Having more than doubled our original equity investment in Elster, I am delighted to be able to propose a £2.0 to £2.5 billion return of capital to our investors. This is an excellent outcome for shareholders and represents another significant validation of the Melrose Group’s business model.
 
“We look forward to completing the Elster disposal in Q1 2016 and delivering further shareholder value through our highly successful “buy, improve, sell” model.

“The board is excited to begin the next successful chapter in Melrose’s history and in due course looks forward to inviting shareholders to invest in the next project.”

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