Melrose proposes 600m-pound cash return

21st Jan 2014 07:52

Industrial investment firm Melrose has confirmed that it will return 600m pounds to shareholders after the disposals of five of its FKI businesses last year.The businesses, which were disposed of in the second half of 2013, were sold for a total of £945m, more than tripling shareholder value in respect of these assets within five years of ownership."The disposals represent a significant return on equity investment and add to the company's already strong track record," Melrose said.As the company said in November, it will use part of the proceeds to return cash to shareholders, equivalent to 47p per share, or £600m in total.The remaining proceeds will be used to pay down Melrose's existing borrowings.Shareholders will have the choice to receive their proceeds in a form of either income or capital and, if capital, the timing of such return.This will be accompanied by a 11-for-13 share capital consolidation which is designed to maintain Melrose's share price after the proposed return of capital."Realising value for businesses at the appropriate time and returning all or part of this value to shareholders has been a fundamental part of the 'buy, improve, sell' strategy that Melrose has followed since its inception 10 years ago."BC