Saturday, 23 February, 2019

GKN takover bid heats up: Now Dana offers secondary London listing

GKN takover bid heats up: Now Dana offers secondary London listing GKN takover bid heats up: Now Dana offers secondary London listing
Melinda Barton | 20 March, 2018, 16:45

The announcement comes as GKN hits back at the takeover bid by announcing that once it sells its Driveline business to the U.S. firm Dana, the resulting company will have a secondary listing on the London stock exchange as well as a primary listing in NY.

Melrose had on Monday said it would inject about 1 billion pounds ($1.4 billion) into GKN's pension scheme in its latest attempt to convince shareholders to back its 7.8 billion pound bid and win over political opponents of the deal.

Today's round in the pair's war of words comes after Columbia Threadneedle yesterday came down in support of GKN's rationalisation plans.

Last week Airbus, GKN's biggest customer, said it could not guarantee new work to an owner with a short-term perspective, a point also highlighted by Unite following the Melrose meeting.

GKN (LON:GKN) has received a boost in its takeover battle with Melrose Industries (LON:MRO), with a major shareholder opposing the turnaround specialist's offer, Reuters has revealed.

GKN group finance director Jos Sclater said: "GKN has a clear and comprehensive plan to reduce its pension liabilities and eliminate the deficit in its United Kingdom pension schemes".

Melrose, which has a history of restructuring companies before selling them on, has been facing calls from MPs, unions and even GKN customers to clarify its intentions since its interest first surfaced.

GKN Plc's rival suitors offered additional sweeteners to win over the United Kingdom aerospace supplier's shareholders, who are set to decide in coming weeks which side to support.

"Now it appears to have unveiled a £1bn plan that would achieve less than GKN's own agreement with the trustees, at a greater cash cost which would erode shareholder value".

"Melrose's measured approach represents certainty of strategy, value and management".

In a full and frank exchange with Melrose bosses, Unite representatives pressed for concrete guarantees on levels of investment and where it would be targeted should Melrose succeed with its hostile takeover of GKN.

Speaking after the meeting Unite assistant general secretary for manufacturing Tony Burke said: "Unite remains of the view that Melrose's takeover would be bad for United Kingdom jobs, investment and GKN customers".

Melrose said all recent attempts to engage in "constructive discussions" with GKN have been blocked.

"I think our shareholders deserve better".