Standard Life Investments, a 2.9% shareholder in Tomkins PLC (TOMK.LN), Thursday urged the board to reject the 325 pence a share cash bid approach it received from Onex Corp. (OCX.T) and the Canada Pension Plan Investment Board.

"The proposed bid materially undervalues the group and its prospects," said David Cumming, Head of UK Equities at Standard Life Investments, a unit of insurer Standard Life PLC (SL.LN).

"Should the board choose to recommend a bid at this level we will vote against the transaction as we do not believe that it is in the best interests of shareholders," Cumming added.

The approach, made to the U.K. engineering and manufacturing company Monday, values Tomkins at GBP2.86 billion and was well-received by investors who pushed the stock up 81 pence, or 35%, to 311 pence, valuing the company at GBP2.74 billion minutes after the announcement, together with a strong first-half trading performance report.

Since then, shares have maintained a similar level and at 1545 GMT, were up 7 pence, or 2.4% at 307 pence.

Tomkins makes products for the industrial, automotive and building products markets and was hit by the economic downturn, causing it to close some plants and cut jobs to save cash. Products include power transmission systems and sensors and valves for the industrial and automotive markets and air distribution products, bathtubs and showers, for the building market.

It has experienced a pick-up in demand since the latter half of 2009, although it is still cautious about its outlook due to economic uncertainty.

Onex and the Canada Pension Plan Investment Board are conducting due diligence on the company.

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com
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