FTSE 100 group continues to believe offer is ‘derisory’
GKN (LON:GKN) could grant investors more time to decide on Melrose Industries’ (LON:MRO) hostile takeover bid, the aerospace and automotive group has said. The move comes amid an ongoing takeover battle, with the turnaround specialist having turned to the FTSE 100 group’s shareholders after its offer was rejected by the board.
GKN’s share price has retreated in today’s session, having given up 0.99 percent to 401.50p as of 14:33 GMT. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.40 percent lower at 7,142.30 points.Latest twist in GKN saga
GKN said in a statement today that it was prepared to consider granting an extension to the City Code timetable, giving investors more time to decide on Melrose’s hostile takeover bid. With the offer requiring approval from the Committee on Foreign Investment in the United States (CFIUS), the FTSE 100 group noted that the process of securing the go-ahead was ‘likely to take substantially longer’ than the City Code offer timetable, based on specialist US legal advice.
“GKN firmly believes that shareholders should […] not be placed in a position where they have to form a final view on the offer while there remains uncertainty about the timetable and the outcome of a matter as material as the CFIUS process,” the blue-chip company explained.GKN still sees offer as ‘derisory’
GKN noted that it continued to believe that the offer was ‘derisory’ and that it had ‘a far better strategy and detailed operating plan’ to deliver shareholder value. The group’s turnaround plan includes separating its aerospace from its automotive business, while Melrose has said that it is planning to ‘declutter’ the business to drive improvement.
Today’s twist comes after earlier this week, Prime Minister Theresa May promised that the government will ‘act in the UK national interest’ in relation to Melrose’s bid for GKN.