Melrose increases offer for GKN to £8.1bn

Melrose specialises in buying industrial companies before improving them and selling them off

Melrose specialises in buying industrial companies before improving them and selling them off

Melrose Industries (MRON.L) increased its hostile offer for GKN (GKN.L) to 8.1 billion pounds on Monday by boosting the equity element of the offer, appealing to investors after the British engineering firm struck a rival deal of its own last week.

In a letter to GKN shareholders, Melrose chairman Christopher Miller hit out at the takeover target's own efforts to fight off the hostile bid, particularly GKN's recent agreement to merge its automotive business with USA firm Dana in a 6.1 billion U.S. dollar (£4.4 billion) deal.

Melrose's chairman went on to criticise GKN management for the way it has handled the business and for failing to hold talks with Melrose over the offer.

The turnaround specialist said all recent attempts to engage in "constructive discussions" had been refused by the GKN board.

Melrose said that Monday's offer, up from a previous one of £7.4bn, was its best and final offer and would not be improved "under any circumstances". Melrose further commented on the FTSE 100 group's agreed automotive tie-up with Dana, arguing that the transaction was "prejudicial to GKN's United Kingdom shareholders".


He added: "Melrose believes that this hasty and ill-thought-through transaction is prejudicial to GKN's shareholders". As a result, shareholders in the FTSE 100 company will end up owning 60 percent of Melrose and receive £1.4 billion in cash.

GKN shares were 2.5%% higher at 446p in early trading on the FTSE 100 - changing hands below the raised takeover price.

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

The deadline for acceptance is 1pm on Thursday 29 March.

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