Melrose has upped a hostile takeover offer for Redditch-based engineering company GKN to £8.1bn.
Under the new terms of the proposed deal, Melrose, a London-based company which invests in firms with a view to improving their financial performance, will pay GKN investors 81 pence in cash for every GKN share they hold, plus1.69 new Melrose shares. That would leave GKN shareholders owning 60 per cent of Melrose.
Under a previous offer, GKN shareholders would have received 1.49 new Melrose shares.
Melrose said that Monday’s offer, up from a previous one of £7.4bn, was its best and final offer and would not be improved “under any circumstances”.
Melrose first approached GKN back in January and since then the board of the latter has been trying to prove to shareholders that it can create greater value for them without being taken over.
Last week, GKN, which specialises in making car and plane components, announced a $6.1bn deal to merge its car parts business with Dana Incorporate, an American company.
But on Monday Melrose said that it thought that tie-up was “hasty and ill-thought-through”.
GKN shareholders now face a 29 March deadline to accept or reject the new Melrose offer.
“We are more convinced than ever that the Melrose team, who have decades of experience in successfully transforming businesses, are the only real choice of team to re-energise and re-focus GKN to unlock its full potential,” Melrose said in its statement.
GKN in a separate statement on Monday said that its board “continues to view the offer as entirely opportunistic and believes that its terms fundamentally undervalue GKN and its prospects”.
