LONDON—Pinafore Acquisitions Ltd. has completed the first step in its bid to purchase Tomkins P.L.C. for about $4.5 billion in cash, although at least one shareholder has threatened to block the deal.
Tomkins' board of directors approved the Canadian firm's takeover bid July 27; it now needs the support of a majority of Tomkins' shareholders, who are expected to meet during the last week of August to cast their votes, a Tomkins spokeswoman said.
Tomkins is the parent of hose and belt maker Gates Corp., based in Denver; Rochester Hills, Mich.-headquartered Trico Products, a manufacturer of wiper blades, wiper systems and electronics; Schrader Electronics, an automotive parts maker headquartered in Antrim, Northern Ireland; and several other businesses.
The spokeswoman said the board unanimously recommended that investors support the acquisition, while Tomkins Chairman David Newlands noted that the board's directors believe the transaction is fair and in the best interests of the company's shareholders.
Stakeholders will receive a 41-percent premium over the firm's July 16 closing stock price.
The London-based firm's directors are supporting the cash offer from the consortium, which first approached the board with a takeover offer in March, because it provides the company's shareholders “with certain value today and fairly reflects both the value of the group today and its future potential,” Newlands said.
Pinafore—a consortium comprised of Toronto-based Onex Corp., a manufacturer of a variety of products that focuses on the automotive industry, and Canada Pension Life Investment Board Ltd.—has the support of at least two major Tomkins' shareholders, JPMorgan Asset Management (UK) Ltd. and Schroder Investment Management Ltd., according to a Pinafore spokesman.
Together they represent more than 9 percent of Tomkins' existing issued shares.
But at least one shareholder—and possibly more—apparently doesn't, which could create a roadblock in Pinafore's path, it was reported in London.
The known dissident—Edinburgh, England-based Standard Life—said it has the backing of other shareholders but did not say who they were.
The Pinafore spokesman called the threat “complete nonsense.” He said Standard Life has about 1.5- to 2- percent interest in Tomkins and the banks on both sides of the transaction said Standard Life doesn't have the support it claims.
Pinafore Chairman Seth Mersky said that as economies struggle globally, “significant challenges remain for all industrial companies. We believe that our offer represents a great reward for Tomkins' shareholders and a chance for us to build value over a long investment horizon.”
A Gates spokeswoman declined comment on the transaction, and the Pinafore spokesman said the consortium was focusing strictly on the acquisition. “No formal plans have been set” on any of the companies involved in the deal, he said.
Tomkins is a global engineering and manufacturing group that produces a variety of goods for the industrial, automotive and building products markets. It employs more than 25,000 and had revenue of about $4.2 billion in 2009.
The firm ranked as the seventh largest non-tire rubber product maker worldwide with rubber product sales last year of $2.35 billion, according to Rubber & Plastics News' data.