Melrose Industries PLC raised its hostile bid for GKN PLC by 9 percent in a last-ditch attempt to woo shareholders to its buyout proposal and reject a competing plan by the UK engineering firm to break itself up.
The final offer of ￡4.67 a share is valued at ￡8.1 billion (US$11 billion), Birmingham-based Melrose said in an open letter to GKN shareholders yesterday.
While the shares rose as much as 2.7 percent, GKN said its own proposal is worth more than ￡5. It said it study the new offer.
Investors have until March 29 to decide whether to take the cash-and-stock offer that would hand Melrose the task of turning around the struggling business, or stick with GKN’s plan to sell off its automotive unit and focus on aerospace.
Last week, GKN agreed to combine the driveline business to US-based Dana Inc in a US$6.1 billion transaction aimed at repelling its suitor.
Calling that plan a “hasty fire-sale” and a “bad deal,” Melrose said many investors would not be able to hold the shares being offered as part of the automotive deal.
“We have recently made attempts to engage in constructive discussion with the GKN board with a view to agreeing the terms of a recommended offer,” Melrose said in the letter. “Your board has unequivocally declined each time to enter into any such discussions.”
The aerospace business has attracted a number of approaches at values “significantly’ above what is reflected in the current share price, GKN said in its appeal to investors.
It is not following up on any proposals because management remains focused on turning the business around, it said.
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