Markets

GKN share price outperforms market as Melrose unveils higher offer

GKN share price outperforms market as Melrose unveils higher offer

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

Melrose has increased its hostile bid for GKN and told shareholders in the United Kingdom engineering firm that it will be its "final offer".

It has gone directly to shareholders with its offer because, it said, the GKN board continued to refuse any "constructive discussions". It has offered to give back £2.5bn to shareholders and agreed to merge its vehicle unit with United States company Dana.

"On the other hand your Board is attempting a hasty fire-sale of GKN businesses before they have been given a chance to reach their potential and with damaging consequences, we believe, for all stakeholders".

The offer values GKN shares at 463.5p, after Melrose shares slipped to 222.7p in early trading.




Mr Miller said some GKN investors would not be able to hold the foreign listed shares, adding that the Driveline agreement was likely to involve a "lengthy and uncertain completion process" with competition clearances needed in the US, EU and China. Melrose further commented on the FTSE 100 group's agreed automotive tie-up with Dana, arguing that the transaction was "prejudicial to GKN's United Kingdom shareholders".

Melrose said that the deal with Dana was "ill-thought-through" and would face regulatory hurdles.

Melrose first approached GKN back in January and since then the board of the latter has been trying to prove to shareholders that it can create greater value for them without being taken over.

The FTSE 100 group's investors have until 13:00 GMT on March 29 to accept the current offer, which, Melrose noted, "will not be increased under any circumstances".


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