Britain's GKN rejects Melrose $11.2 bln final offer

Britain's GKN rejects Melrose $11.2 bln final offer

British engineering group GKN on Monday rejected an improved and final takeover bid, worth £8.1 billion, from turnaround specialist Melrose Industries.

GKN has been fighting off Melrose's advances since mid-January, when it rejected a £7.4bn bid.

"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".

Melrose has said this will be the final offer as the acceptance deadline draws near.

According to the FTSE 100 firm, the new bid does not reflect the value of GKN's "world class aerospace business" or the benefits of combining GKN Driveline and Dana Incorporated - GKN last week agreed to merge its auto parts business with the USA firm in a deal worth $6.1bn (£4.4bn).

Shares in Melrose were down 4.9 per cent at the time of writing, while GKN's stock was down more than two per cent.

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Melrose said that the deal with Dana was "ill thought through" and would face regulatory hurdles.

It added, "Since we announced our intention to separate our [aviation and automotive] businesses, we have received a number of approaches for GKN Aerospace at values significantly above what we believe is reflected in GKN's share price today".

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

"Following the (Dana) transaction, GKN shareholders will own 47 percent of a $14 billion revenue global automotive group and will retain ownership of GKN's outstanding remaining businesses", said GKN Chairman Mike Turner.

It is not following up on any proposals because management remains focused on turning the business around, it said.

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