GKN (LON:GKN) has flagged savings from its Driveline division, amid the ongoing battle with Melrose Industries (LON:MRO), which has launched a hostile takeover offer for the company. The move comes with the blue-chip group looking to split its aerospace and automotive divisions.
GKN’s share price has inched higher in London in today’s session, having gained 0.14 percent to 420.90p as of 10:28 GMT. The shares are marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing at 7,158.12 points, flat in percentage terms. The group’s shares have added nearly 13 percent to their value over the past year, as compared with a near 2.4-percent dip in the Footsie.
GKN updates on Driveline prospects
GKN announced in a statement today that by implementing its ‘Project Boost’ within its Driveline business, it expects the division to deliver £153 million of recurring annual cash benefit from the end of 2020.
“Our Driveline business is perfectly positioned to take advantage of the changing automotive market,” GKN’s chief executive Anne Stevens commented in the statement. The update comes after the blue-chip engineer recently unveiled its plans for its aerospace business, noting that it expected its ‘Project Boost’ for the division to deliver £160 million of recurring annual cash benefit from the end of 2020.
GKN has been trying to fend off a hostile takeover approach by Melrose, which meanwhile has been pressured by MPs to reveal legally binding commitments to protect jobs and invest in research and development, should it succeed in acquiring the FTSE 100 group.
Analysts on blue-chip engineer
Peel Hunt remains bullish on GKN, having reiterated its ‘buy’ stance on the shares this month, with a price target of 500p. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 437.13p.