Melrose subsidiary sale on hold after CEO falls ill
Plans by Melrose Industries to divest itself of an American subsidiary to help plug a £1bn pension deficit has been put on hold.
The sale of Ergotron, a maker of equipment for schools and hospitals, was expected to raise around $800m (£620m).
However, the disposal has now been delayed due to retirement of Ergotron’s chief executive, Pete Segar, due to illness.
Read more: Will GKN go cap in hand to debt markets to manage £2bn pension hole?
If the process is resumed, the divestment will be the first major deal for the FTSE100 firm since April when it acquired the 259-year-old engineering firm GKN for £8bn.
The hostile takeover left Melrose exposed to GKN’s pension scheme, which has around 32,000 members and is £1bn in the red.
Around five per cent of the Ergotron sale was earmarked to help fill in the hole.
Melrose has also raised the possibility of selling of GKN’s powder metallurgy division, a sale which could raise as much as £1.8bn.
Read more: Melrose bosses in line for £206m payday
A spokesman Melrose, which specialises in buying industrial companies with a view to improving their performance and selling them on within five years, said the company will still inject £1bn into GKN’s pension pot as planned, according to the Financial Times.