GKN share price outperforms as Melrose unveils higher offer

Final bid values blue-chip engineer at £8.1 billion

GKN share price outperforms as Melrose unveils higher offer

Shares in GKN (LON:GKN) have advanced in London this morning after Melrose Industries (LON:MRO) cranked up its hostile takeover offer for the British engineering group. The move came after the blue-chip company agreed a deal last week to merge its automotive division with Dana.

As of 08:11 GMT, GKN’s share price had added 1.75 percent to 442.70p, outperforming the benchmark FTSE 100 index which currently stands 0.18 percent higher at 7,237.72 points. Melrose’s share price meanwhile has slipped into the red and is currently 0.76 percent lower at 223.00p, as compared with a 0.32 percent gain in the mid-cap FTSE 250 index.

Melrose hikes takeover offer

Melrose announced in a statement this morning that it was increasing its takeover offer for GKN to 467 pence per share, valuing the blue-chip group at £8.1 billion. As a result, shareholders in the FTSE 100 company will end up owning 60 percent of Melrose and receive £1.4 billion in cash. Melrose’s previous offer valued the engineering group at £7.3 billion.

The turnaround specialist, which launched a hostile bid earlier this year following GKN’s rejection of tis takeover approach, noted that “all recent attempts to engage in constructive discussions have been refused by the GKN Board”. Melrose further commented on the FTSE 100 group’s agreed automotive tie-up with Dana, arguing that the transaction was “prejudicial to GKN’s UK shareholders”.

The FTSE 100 group’s investors have until 13:00 GMT on March 29 to accept the current offer, which, Melrose noted, “will not be increased under any circumstances”.

GKN evaluating revised bid

GKN said in a short statement that its board was currently evaluating the revised offer, and that shareholders were advised “not to sign any document which Melrose or its advisers send to them”.

As of 08:42 GMT, Monday, 12 March, GKN plc share price is 442.00p.

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