Published: Mon, March 12, 2018
Money | By Armando Alvarado

Melrose Raises Offer for GKN to $11.2 Billion to Sway Investors

Melrose Raises Offer for GKN to $11.2 Billion to Sway Investors

Melrose has raised its hostile bid for GKN, telling shareholders in the FTSE 100 engineering firm it will be its "final offer".

It says all recent attempts to engage in "constructive discussions" with GKN have been blocked. The move came after the blue-chip company agreed a deal last week to merge its automotive division with Dana.

Christopher Miller, chairman of Melrose, described the tie-up with Dana as a "bad deal" in a letter to GKN shareholders and accused the GKN board of attempting a "hasty fire sale".

However, this was based on Melrose's previous offer, which it said was "opportunistic" and "fundamentally undervalues" GKN's prospects.

Melrose first approached GKN back in January and since then the board of the latter has been trying to prove to shareholders that it can create greater value for them without being taken over.

As of 08:11 GMT, GKN's share price had added 1.75 percent to 442.70p, outperforming the benchmark FTSE 100 index which now stands 0.18 percent higher at 7,237.72 points.

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GKN has consistently dismissed the takeover as "opportunistic" - moving to offset any shareholder interest in a sale by planning to merge its Driveline division with USA rival Dana in a deal worth £4.4bn.

Hikma Pharmaceuticals Plc said on Monday it plans a new clinical study on its generic version of GlaxoSmithKline's GSK.L popular lung drug Advair, as it looks to resolve an ongoing dispute with the Food and Drug Administration over plans to launch the drug in the U.S.

The Pensions Regulator has warned that the Melrose takeover could affect the company's ability to fund its pension scheme.

The deadline for acceptance is 1pm on 29 March.

Ten UK sites, including Bristol, Cowes, Luton, Portsmouth, Birmingham and Telford.

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