Melrose increases GKN takeover bid to £8.1 billion

Melrose
Melrose have increased their takeover offer for GKN.

Melrose has increased its offer for UK engineering firm GKN (LON:GKN) from £7.4 billion to £8.1 billion.

The offer was announced by the company in a brief statement released on Monday morning.

Melrose said this would be its “final offer” for the company, which would equal 467p per share.

The bid would give GKN shareholders a 60pc stake in the merged company, an increase from 57pc offered previously.

In response to the revised bid, GKN’s chairman, Mike Turner, told investors on Monday that Melrose “lacks experience in several critical areas and that its priorities are inappropriate for running a global technology-based business like GKN”.

“Melrose is offering a premium lower than any relevant FTSE 100 takeover in the last 10 years, and substantially lower than any of its previous acquisitions,” Turner added.

Back in January GKN rejected a £7.4 billion hostile takeover bid from Melrose, which specialises in acquisitions.

GKN had rejected an initial bid of £7 billion, which the company declared as “opportunistic”.

GKN became takeover target after issuing a series of profit warnings last year.

In particular, its aerospace division encountered difficulties, in light of “operational challenges” and lower profit margins.

Moreover, last November the company announced the departure of incoming chief executive, Kevin Cummings, a mere few weeks before he was supposed to assume the role.

It was announced that non-director, Anne Stevens, a former senior Ford executive would instead assume the role as interim chief executive in January.

GKN is headquartered in Worcestershire in the UK and has more than 59,000 employees across 30 countries.

The British multi-national firm produces wing tips for Airbus, alongside various parts for car-makers.

Shares in GKN are currently trading down marginally by 0.32 percent as of 10.57AM (GMT).

 

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Nicole Jeary
Nicole covers emerging global economic and political events for The UK Investor Magazine. Her focus is particularly upon company news and political developments in Europe and the US.