British engineer GKN rejects final £8.1bn Melrose bid
London, (MILLAT ONLINE):British engineering group GKN on Monday rejected an improved and final takeover bid, worth £8.1 billion, from turnaround specialist Melrose Industries.
Melrose had earlier Monday offered the equivalent of $11.2 billion or 9.1 billion euros — in response to GKN’s announcement ahead of the weekend that it had agreed a tie-up of its automotive unit with US car parts group Dana.
GKN’s move on Friday had been seen as a defence against a full takeover by Melrose, which had already had an offer worth £7.4 billion turned down.
Responding to Monday’s higher offer, the board of GKN described it “as entirely opportunistic and believes that its terms fundamentally undervalue” the company and its prospects.
The new offer proposed that GKN shareholders own 60 percent of Melrose and receive £1.4 billion in cash.
Reaching out in a letter to GKN shareholders on Monday, Melrose chairman Christopher Miller said:
“On the one hand you can join us on a journey of value creation by investing in a UK listed manufacturing powerhouse worth over £10 billion today and receiving £1.4 billion of cash.
“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.”
GKN issued profits warnings late last year following a difficult period for its US aerospace business — resulting in Melrose promising an operational and management overhaul of the company should its offer be accepted.
“The muted market reaction of the GKN share price to the increased offer… is the strongest indication yet that Melrose might not get its way,” noted Rebecca O’Keeffe, head of investment at Interactive Investor.