GKN’s (LON:GKN) board is stepping down amid the company’s takeover by Melrose Industries (LON:MRO), the FTSE 100 engineering group has said. The move came after the blue-chip company lost a battle with the turnaround specialist last month.
GKN’s share price has advanced in London this morning, having added 1.20 percent to 481.70p as of 09:48 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.23 percent higher at 7,334.13 points.
GKN board steps down
GKN announced in a statement this morning that its board was stepping down with Melrose Industries’ takeover offer having become unconditional.
“The outgoing Board now recommends that GKN shareholders who have not yet done so accept the Offer,” the company said in the statement. Melrose said in a separate statement that nearly 2.5 billion new shares were admitted to trading on the London Stock Exchange’s main market for 1.46 billion GKN shares received as of 12pm on April 18, representing just under 85 percent of voting rights in the blue-chip company. GKN’s shares are expected to be delisted on or around May 21.
UK to wave deal through
In a separate development, the Financial Times reported this morning that the UK government was set to wave through Melrose’s offer for GKN as early as next week, concluding that it raised no national security concerns.
Greg Clark, the business secretary, and defence secretary Gavin Williamson, however, are expected to seek additional guarantees from Melrose on the company’s future defence work, before a formal decision to approve the deal is given.
“From Gavin’s point of view, the important thing is to make sure there are sufficient protections and safeguards in place on the defence elements of the deal,” one government official close to the discussions told the newspaper. “But Melrose is a UK company and it would be unprecedented to refer this deal on national security grounds.”