Engineering giant will sell off parts of its business to rebuff Melrose bid
GKN said today that it will sell off parts of its business to return £2.5bn in cash to shareholders over the next three years in a bid to fend off hostile suitor Melrose Industries.
Last month, the engineering giant had rejected a £7.4bn offer from Melrose saying it “fundamentally undervalued” the firm.
Later, GKN said Melrose isn’t the right owner for GKN as it “lacks experience in relevant high-technology businesses and of investing for the long-term.”
The FTSE 100 company said that it expects to book one-off costs of £450m from the program — of which 32 per cent will be incurred in 2018, 44 per cent in 2019 and the rest in 2020.
“This strategy is expected to generate significant cash for shareholders in the short term and meaningful sustainable cash flows over the mid to long term,” said GKN chief executive Anne Stevens, adding: “We have a plan and we are dedicated to delivering it.”