 has announced its "final offer" for GKN (LON: GKN), offering a total of £8.1 billion. GKN previously rejected an offer made in January,){kind=link}
Melrose (LON: MRO) has announced its “final offer” for GKN (LON: GKN), offering a total of £8.1 billion.
GKN previously rejected an offer made in January, where Melrose offered a £7.4 billion bid.
The engineering business has found itself at the centre of many takeover offers after the group issued profit warnings late last year.
In a response to the Melrose offer, GKN struck a £4.4 billion deal to merge business with the US group Dana. Christopher Miller, chairman of Melrose, called the offer a “bad deal”.
“Melrose believes that this hasty and ill-thought-through transaction is prejudicial to GKN’s shareholders,” he said.
Melrose has increased how much GKN shareholders will own in Melrose after the deal by three percent – from 57 percent to 60 percent.
In addition, the group is now offering 467 pence a share, as well as offering to give shareholders £1.4 billion in cash.
After the new offer, shares remained fairly stagnant were up less than 2 percent in early trading.
“The muted market reaction… is the strongest indication yet that Melrose might not get its way,” said Rebecca O’Keeffe, head of investment at Interactive Investor.
“The robust efforts GKN has taken to protect itself from the hostile bid, including the proposed disposal of its Driveline business to Dana, combined with the comments from Melrose that their offer will ‘not be increased under any circumstances’ is leading investors to conclude that GKN has won this battle, at least for now.”
The potential deal has created waves in the political sphere, with MPs calling for the deal to be blocked.
A letter, which was initiated by Labour MP Jack Dromey and Conservative MP Rachel Maclean, raised fears that GKN would be broken up and sold owners overseas.
“GKN is one of the most prominent engineering firms in the UK, the third biggest in our country. It is a world-class success story, the pride of British industry which supplies components to companies such as Jaguar Land Rover,” it read.
“We are writing to you because we all have a GKN plant and/or supply chain-affected firm in our constituencies. Due to this, we have shared our concerns about the proposed hostile takeover bid by Melrose and want to express to you why we believe the takeover should not succeed.”