GKN: Clark under fire for 'last minute' Melrose demands

28 March, 2018, 00:52 | Author: Regina Lloyd
  • GKN site in Telford

In response, Mr Peckham said Melrose had agreed a number of legally enforceable undertakings with the Takeover Panel to address the government's concerns - including maintaining GKN's United Kingdom base and its R&D spending. "By moving now, the Dana-GKN Driveline combination will be strongly positioned to be a global leader in this field".

"The Melrose offer remains the low-value, high-risk option for shareholders".

A Sunday Telegraph article contained the following from Anne Stevens, chief executive, 'Stevens says ... she's convinced investors will back [GKN]'.

The company has also promised that the GKN aerospace and GKN driveline businesses will continue to retain the same rights which they have at 26 March 2018 to use the GKN trade marks and that Melrose will procure that expensed research and development spend of the GKN Group during the period from 1 January 2019 to 31 December 2023 will be at least 2.2 per cent of the aggregate of GKN Group sales for the financial years ending 31 December 2019, 31 December 2020, 31 December 2021, 31 December 2022 and 31 December 2023.

"We therefore expect the market to fully value this highly attractive business in line with its peers".

He added: "We believe that Melrose would find it extremely hard to create equivalent value in the future from GKN Driveline if its offer were to be successful".

Citywire, however, quoted Numis analyst David Larkam as commenting that the business was being sold "too cheaply and too early".

Melrose chairman Christopher Miller, in a statement to the London Stock Exchange on Monday, said: "The GKN board's lack of confidence in its own abilities to run the business is a clear indication that it's time for a change". Synergy benefits also help to support a transaction.

The news comes ahead of Thursday's deadline for the FTSE 100 group's shareholders to decide on the turnaround specialist's takeover proposal.

Clark did not rule out further intervention on the grounds of national security, since GKN "is a longstanding supplier of components and services directly, and through a chain of suppliers, to the British Armed Forces and to security bodies in some of our allies".

This followed after GKN slammed Melrose for making "misleading" comments relating to the deficit of the engineering giant's two UK DB schemes, shortly before Melrose pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the business.

"Add the warnings by major customers such as Airbus about not being able to give GKN new work if Melrose succeeds, and you are left in a sea of uncertainty and instability".

"We urge shareholders to cast their votes for a proven Melrose team with an outstanding track record and a plan to revitalise GKN".



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