Published: Mon, March 12, 2018
Business | By Kate Woods

GKN share price outperforms market as Melrose unveils higher offer

GKN share price outperforms market as Melrose unveils higher offer

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

He said Melrose had gone directly to shareholders with its latest offer because the GKN board had rebuffed all recent attempts to engage in "constructive discussions".

It said this will be a final offer of 467p per share and would mean GKN shareholders would own 60 per cent of Melrose - up from 57 per cent, and receive £1.4bn in cash.

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Last week, GKN, which specialises in making auto and plane components, announced a $6.1bn deal to merge its vehicle parts business with Dana Incorporate, an American company.

"On the one hand you can join us on a journey of value creation by investing in a United Kingdom listed manufacturing powerhouse worth over £10 billion today and receiving £1.4 billion of cash". 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's previous offer valued the engineering group at £7.3 billion.

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Mr Miller said: "Your Board has unequivocally declined each time to enter into any such discussions with us and, as recently as Friday 9 March, was unwilling to even enquire on your behalf as to the terms of any revised proposal, a decision that no doubt you will find both surprising and disappointing". Last week GKN announced the sale of its Driveline auto powertrains business to Dana, an American rival, for $6.1 billion.

The deadline for GKN shareholders to accept its offer is March 29, it said, adding that it encouraged shareholders to accept its offer and help create a "UK-listed manufacturing powerhouse with very significant future potential".

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