Tomkins gets £2.9bn offer
INVESTORS in Tomkins, the automotive and building products group, reacted coolly to a £2.9bn takeover approach from a consortium of Canadian investors yesterday.
Tomkins said it was in advanced talks with a team comprising Onex, Canada’s largest listed private equity house, and the Canada Pension Plan Investment Board, a gargantuan savings fund, over an indicative offer valuing the company at 325p per share. The approach sent Tomkin’s shares up 27.8 per cent to 294.2p.
It is understood a recommended bid could be tabled within weeks depending on the outcome of due diligence. Analysts suggested the board and investors would be glad to accept a price tag of £2.9bn given the shares prolonged weak performance.
But one fund manager said he expected an improved offer, adding: “Very rarely in these situations is the first shot the last.”
Another shareholder likened the situation to US buyout firm Apollo’s attempt to buy Brit Insurance. He said: “It’s financial buyers, who don’t necessarily have synergies, showing an interest because they recognise the business is undervalued.”