| CATEGORY: NEWS AND ANNOUNCEMENTS SECTOR: GENERAL INDUSTRIALS |
Standard Life hits out at Tomkins bid |
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Fri 23 Jul 2010
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LONDON (SHARECAST) - Pensions group Standard Life, which has shares in Tomkins, has rejected a recent offer for the engineering and manufacturing group from a Canadian private equity firm.
David Cumming, head of UK equities at Standard Life Investments, said the 325p-a-share offer for Tomkins from Toronto-based private equity Onex Corporation and the Canada Pension Plan Investment Board, which was announced on Monday, undervalues the company.
‘We are disappointed that the board of Tomkins has agreed to open the books [at 325p],’ he said.
‘We feel that at this price the proposed bid materially undervalues the group and its prospects.’
Shares in Tomkins soared after it announced it was in talks with the Canadian group. However, they still lag behind the offer price, perhaps because Tomkins’ announcement of the talks was accompanied by a mixed trading statement.
Tomkins, which has industrial & automotive and building products divisions, said that its performance kept improving after its last update at the start of May up to the end June, fuelled by the sales momentum that began in the second half of 2009.
“The increase in sales volumes of approximately 23% year on year was driven by a combination of restocking and strengthening demand, offset to some extent by continued declines in the US construction markets,” it said.
However it added that: ‘Notwithstanding the strong performance in the first half of 2010, we believe that global economic uncertainty coupled with recent downwards trends in some macro indicators is likely to result in a negative impact on our end markets in the second half of 2010.’
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