Wednesday, 17 January 2018

Engineering giant GKN rejects £7.4bn hostile takeover bid

Engineering giant GKN has rejected a £7.4bn hostile takeover bid from Melrose Industries.

Turnaround specialist Melrose said it believed it could "deliver significantly greater benefits" to GKN's shareholders than GKN could on its own.

Last week, GKN rebuffed an initial £7bn bid from Melrose because it "fundamentally undervalued" it.

It said the terms of the latest offer were "effectively unchanged".

Melrose is offering 430.1p in cash and shares for GKN, compared with its initial bid of 405p per share.
Under the terms of the offer, GKN shareholders would own 57% of the enlarged group and, according to Melrose, would become "major participants in the potential future value creation in both the GKN and Melrose businesses".

But in its statement on Wednesday, GKN's board said Melrose's proposal would "materially dilute the exposure of GKN shareholders to the meaningful upside opportunities that the board believes are present within the group".

GKN's new management, under chief executive Anne Stevens, was "currently undertaking a series of shareholder meetings to explain why GKN's current owners should retain 100% of the benefits of the upside potential in GKN, rather than handing 43% to Melrose's management and shareholders", it added.

BBC              News.

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