Jan 17, 2018

Melrose targets GKN with largest firm UK hostile bid since 2009

Melrose Industries on Wednesday launched the largest firm hostile bid in the UK since Kraft swooped on Cadbury in 2009, with its formal £7bn cash and share offer for FTSE engineering group GKN. The bid comes just two days into Melrose's campaign to woo the FTSE 100 group's investors with a detailed plan to revive the company's profitability. The bid values GKN at 430.1p a share based on Tuesday's close, reflecting a rise in Melrose's shares since news emerged of the approach. Melrose shares were trading marginally down at 230p. The board of GKN rejected the offer, saying it fundamentally undervalued the company. Anne Stevens, GKN's chief executive, said: "We believe GKN's current owners should retain all the benefits of the clear upside potential in GKN, rather than handing almost half of this upside to Melrose and its shareholders." Under the deal, GKN shareholders would have 57 per cent of the enlarged group, which Melrose argues would allow them to share in the benefits of any turnround.

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