Melrose also offers £1bn pension boost
Melrose’s battle to take control of engineering giant, GKN, seems to be heating up as the turnaround group has now lowered the threshold for shareholder acceptance. It has also said that it would inject an additional £1bn into GKN’s pension scheme.
Shareholders have until 1pm on 29 March to accept Melrose’s offer of 466p a share.
Melrose chairman Christopher Miller said: “GKN’s series of hastily-assembled and ill-considered proposals destroy potential value and add significant risk, not just for shareholders but in the underlying businesses themselves. By accepting the Melrose Offer, GKN Shareholders will keep the potential value of all the GKN assets as majority owners of a much larger business and a management team with a clearly superior track record.
Unless they accept our offer, GKN shareholders will end up with shares in an Aerospace business overburdened with up to £3bn of pension liabilities upon the planned disposals, and a minority shareholding in a Dana-managed Driveline business without a UK primary listing, which many won’t be able to hold.
The proposal we have made to the trustees of up to £1bn of contributions under our ownership is a clear example of what Melrose does which is good for pensioners and shareholders alike and shows we are a good custodian for all stakeholders.
Melrose’s measured approach represents certainty of strategy, value and management. We strongly urge GKN shareholders to accept our offer without delay.”
The announcement comes as GKN hits back at the takeover bid by announcing that once it sells its Driveline business to the US firm Dana, the resulting company will have a secondary listing on the London stock exchange as well as a primary listing in New York.
Earlier this month GKN had announced plans to merge its Driveline business with US auto-engineering firm Dana, leaving it to focus on the aerospace side of its business. Melrose had then criticised the move, arguing that some GKN investors would not be able to hold the shares in the combined business as they would not be listed in the UK.
Meanwhile, the unions who represent GKN employees across the UK will grill Melrose over its plans for the company, when they meet today.
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