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Melrose, which specialises in acquiring and turning around underperforming businesses before selling them on, agreed to sell Nortek in April and planned to use proceeds to pay down debt, reduce a UK pension deficit and return cash.
The proposed return of capital and share consolidation, through which the returns will be executed, would require approval from shareholders, Melrose said.
“We have taken a conservative view for the level of the current return of capital, but if markets continue to recover, we expect to announce a further significant return next year,” CEO Simon Peckham said.
Melrose’s current return plans equal 15 pence per share for shareholders.
The owner of GKN (LON:GKN), which supplies parts to carmakers such as Volkswagen (DE:VOWG_p), also said there were some encouraging signs for its aerospace division after the pandemic hit it hard.
The division had squeezed out a modest profit in the first quarter compared with a loss last year, helped by cost cuts.
Melrose said the group was trading in line with expectations ahead of interim results on June 30, adding that last week it had disposed another business, Brush, for a net cash consideration of 100 million pounds.
($1 = 0.7194 pounds)
