£8bn battle for GKN intensifies

The £8bn battle for GKN has intensified further as both sides seek to publicly win the support of shareholders.

Melrose has launched a hostile takeover bid for the Redditch group – although one national newspaper article this weekend had Melrose chief executive Simon Peckham asking “who is hostile to who?” – while GKN’s management pursue a merger of GKN Driveline with Dana.

Melrose has faced criticism for its short-term view – based on the idea it will look to sell for a huge profit within five years – and GKN got support from Airbus that this would affect R&D partnerships.

This has been refuted by Melrose, who have also confirmed that it has made a formal proposal to inject up to £1bn into GKN’s pension scheme as it counters another objection to its takeover plans.

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.”

GKN has also been seeking to patch up weaknesses in its own plans, and has this morning announced that the combined Dana-GKN Driveline business would have a listing on the London Stock Exchange as well as the New York Stock Exchange. There had been criticisms that institutional investors would not be able to hold shares in a US-only listed group.

Anne Stevens, who became GKN’s chief executive in January, said: “The listing on the London Stock Exchange will make it possible for more of our shareholders to participate in the expected value creation opportunity from the combined Dana and GKN Driveline business.”