GKN faces new £8.1bn Melrose bid in takeover battle

“Turnaround specialist Melrose has increased its offer for engineering giant GKN from £7.4bn to £8.1bn.

It has also raised the amount GKN shareholders would own in Melrose following the deal from 57% to 60%.

Melrose said all recent attempts to engage in “constructive discussions” with GKN had been blocked.

GKN has fought hard against the offer. It has offered to give back £2.5bn to shareholders and agreed to merge its car unit with US company Dana.

Melrose said its latest offer was “final” and “will not be increased under any circumstances”.

It is offering 467p a share, compared with Friday’s closing share price of 435p.

Melrose called GKN’s attempts to fend off the approach a “hasty fire sale of GKN businesses before they have reached their potential”.

Political issue

Also on Monday, GKN issued its latest defence against the Melrose approach.

However, this was based on Melrose’s previous offer, which it said was “opportunistic” and “fundamentally undervalues” GKN’s prospects.

GKN has fought hard against the approach from Melrose, a firm that specialises in buying up industrial companies it believes are undervalued and restructuring them before selling them on.

The takeover approach has also raised fears among unions and MPs that GKN, one of the UK’s largest industrial firms, will be broken up and sold to overseas owners.

The Pensions Regulator has warned that the Melrose takeover could affect the company’s ability to fund its pension scheme.

Last week, a cross-party group of MPs wrote to the Business Secretary, Greg Clark, saying the Melrose takeover should be blocked.

GKN shareholders have until 29 March to decide whether or not to accept Melrose’s offer.

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A brief history of GKN

Founded in 1759 as an ironworks in South Wales

Involved in aerospace, automotive, materials and manufacturing engineering

Operates in 30 countries with 59,000 employees

Employs 6,000 staff in the UK, mostly in aerospace and automotive technology

Ten UK sites, including Bristol, Cowes, Luton, Portsmouth, Birmingham and Telford.

Chief executive Anne Stephens took over in January”

Source – BBC News (http://www.bbc.co.uk/news/business-43369531)