Portfolio

GKN may extend Melrose bid deadline to give shareholders more time to reflect

By Michele Maatouk

Date: Friday 09 Feb 2018

GKN may extend Melrose bid deadline to give shareholders more time to reflect

(ShareCast News) - GKN reiterated its belief on Friday that Melrose Industries' £7bn offer for the engineer is "derisory" as it said it is prepared to give investors more time to consider the bid.
The offer requires US approval, which GKN said would take "substantially longer" than the City Code offer timetable, based on specialist US legal advice.

"GKN firmly believes that shareholders should be allowed to make a fully informed decision and not be placed in a position where they have to form a final view on the offer while there remains uncertainty about the timetable and the outcome of a matter as material as the Committee on Foreign Investment in the US," it said.

"In order to avoid this possibility, the board of GKN is prepared to consider granting an extension to the City Code timetable to enable the CFIUS process to have concluded before shareholders are required to form a final view on the Melrose offer."

The company, which has announced plans to split its aerospace and automotive divisions, also took the opportunity to insist that it has a far better strategy and detailed operating plan, "informed by real industry expertise", to deliver shareholder value.

GKN also said it plans to demonstrate over the coming weeks why its vision for the future of the company offers greater value and certainty than Melrose's offer.

On Thursday, it emerged that MPs have asked the government to consider using its powers to block takeovers for national security reasons to stop Melrose's hostile bid for GKN, which makes technology used in the F-35 fighter jet.

Labour MP Rachel Reeves, who chairs the business, energy and industrial strategy select committee, wrote a letter to business secretary Greg Clark, in which she said: "The hostile takeover bid for GKN raises serious concerns about protections for our vital industries, not least for our industrial strategy, which requires high-skilled jobs in engineering, science and research.

"GKN is important for the automotive and defence sectors of our economy and the Secretary of State needs to provide assurances that Britain's strengths in these sectors will not be undermined by a takeover or by asset-stripping."

At 1515 GMT, GKN shares were down 1.4% to 400p while Melrose was off 1.2% to 210p.

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