Melrose to return £2.4bn to shareholders following Elster disposal

Melrose Industries said it has completed the £3.3bn disposal of its Elster business to Honeywell International and announced the proposed return of around £2.4bn in cash to shareholders, equivalent to 240p per ordinary share.

Melrose agreed the disposal with Honeywell in July and announced in October its intention to return a large part of the net sale proceeds from the disposal to shareholders after completion and to carry out an associated share capital consolidation.

The company said the balance of the net proceeds has been used largely to pay down existing borrowings.

Chairman Christopher Miller said: "With this latest return of capital, Melrose will have given back to investors approximately £4.3bn in cash since our first acquisition in 2005, which is an outstanding outcome for shareholders and a further demonstration of the success of the Melrose ‘buy, improve, sell’ model.

“We are optimistic that a suitable acquisition will be identified to bring additional shareholder value and we look forward to inviting investors to participate in this next project in due course.”

At 1235 GMT, Melrose shares were up 1.1% to 288p.