(Reuters) - The 7.4 billion pound hostile bid for GKN from Melrose Industries is "low price and high risk" and undervalues the company, GKN Chairman Mike Turner said in a letter to shareholders.
Turner said Melrose had a short-term business model which was inappropriate for GKN.
GKN, which makes parts for the Boeing 737 jet, Black Hawk helicopter and components for Volkswagen and Ford cars, said its plan to separate its aerospace and automotive divisions is expected to deliver a 340 million pounds recurring annual cash benefit from the end of 2020.
GKN pledged on Wednesday to return 2.5 billion pounds to investors over the next three years, stepping up its efforts to fend off the hostile bid.
(Reporting by Rahul B in Bengaluru; Editing by David Holmes)
