6th Oct 2015 06:46
LONDON (Alliance News) - Melrose Industries PLC on Tuesday said it has proposed the introduction of a new holding company in order to deliver a GBP2.0 billion to GBP2.5 billion capital return to shareholders following the sale of its Elster Group business earlier this year.
Melrose struck a deal in late July to sell the Elster energy-metering business to US industrial conglomerate Honeywell for GBP3.3 billion in cash. The company operates a "buy, improve, sell" model, under which it acquires underperforming companies, returns them to health and then sells them on.
Under the plans, the company intends to return GBP2.0 billion to GBP2.5 billion of the proceeds from the sale of Elster to its shareholders by creating a new holding company which will return the funds to its shareholders.
These proposals will not effect the trading operations of the existing Melrose Industries business, which following the Elster sale only comprises Brush, the group's electricity generation business, which has suffered in recent years amid tough market conditions.
By Sam Unsted; [email protected]; @SamUAtAlliance
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