Melrose Industries PLC (LSE:MRO, OTC:MLSPF) said it will begin a £500mln share buyback tomorrow after this week agreeing the disposal of its Ergotron business.
In light of the £520mln disposal and its "ongoing strong financial position", the board said it is satisfied that it has "sufficient certainty" in order to begin a buyback that it alluded to in March.
Chief executive Simon Peckham said a buyback had been chosen as "the quickest way" to distribute capital to shareholders.
"We will continue to keep under review the appropriate capital structure of Melrose as we position for continuing success."
Melrose is also hosting an Aerospace capital markets day this afternoon and, ahead of it, provided a synopsis of the content and the slides.
Aerospace revenue is expected to grow 7% a year out to 2030, which would put sales at £4.675bn versus £2.5bn in 2021, with margin potential for the division increased to 14% from 12% on a full market recovery.
"It is positive stuff and matches comments overnight from the Airbus CEO, who is saying that the recovery is coming faster than expected outside China," said broker Peel Hunt.
The numbers are "more positive than we expected" as the company "is moving into the value realisation phase - markets are not perfect but momentum is growing on a business with essentially no debt".
"Our TP of 300p might be double the current share price but we are very confident in its delivery over the next 24 months," the broker said.
Melrose shares were up 8.5% to 154.15p in early trade, leading the FTSE 100.