The Standard Life head of UK equities, David Cummings, has warned shareholders to resist opportunistic takeovers where they could be short-changed, after the 325p-a-share takeover of automotive and industrial parts company Tomkins by a Canadian consortium.
The £2.9bn takeover was opposed by Standard Life which owns a 3 per cent stake in the company. Standard Life lost the vote to reject the deal by 9-1 after voting parties followed Tomkins' main investor Schroders in backing the deal.
Cummings argued that the consortium of Toronto-based private-equity group Onex and Canada Pension Plan had exploited market conditions and was undervaluing Tomkins's prospects. According to him, 400p-a-share was a more appropriate deal for the company.
"We remain of the view that this bid undervalues Tomkins' future prospects. We also hope that this vote will not be seen as a signal to other potential bidders for UK corporates that UK shareholders are prepared to sell assets too cheaply as a consequence of current depressed market conditions," Cummings said in a statement.
