Melrose shares issue success will help fund latest deal
WARWICKSHIRE-based manufacturing turnaround specialist Melrose has announced a near 100% take-up of a major rights issue to help support its latest acquisition.
The Alcester firm said it had received valid acceptances of 98.47% of the latest offering, which represents around £1.18bn.
The company intends using the additional funding to help finance its acquisition of German firm, the Elster Group, in a deal worth £1.5bn.
Christopher Miller, Executive Chairman, has acquired 4,256,039 of the shares with Harris & Sheldon Investments taking up 1,839,286. David Roper, Melrose Executive Vice-Chairman, has acquired 4,008,963 of the shares and chief executive Simon Peckham has purchased 4,042,188.
Other board members have also increased their stake in the business.
Melrose said Investec Bank and J.P. Morgan Securities had now been tasked with selling the remaining 12,957,419 new shares.
The Elster deal will see Mintford, a wholly owned subsidiary of Melrose, acquire the entire issued ordinary share capital of the German organisation. The acquisition is being implemented principally by a US tender offer to Elster shareholders at a price of $82 per Elster share – approximately $2.3bn or £1.5bn in aggregate.
Elster is a world leading engineering company and one of the world’s largest providers of gas, electricity and water meters, gas utilisation products and related communications, networking and software solutions.
Melrose said Elster was a good manufacturing business with the potential to improve its presence in strong end markets such as global energy demand, energy efficiency & conservation and global gasification. As such, the acquisition represented a significant opportunity for growth.
