Melrose ups offer for GKN, says latest bid final

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Melrose has upped a hostile takeover offer for Redditch-based engineering company GKN to £8.1bn.

In a letter to GKN shareholders, Melrose's chairman Christopher Miller said: "On the one hand you can join us on a journey of value creation by investing in a United Kingdom listed manufacturing powerhouse worth over £10 bn today and receiving £1.4bn of cash".

The board of GKN, a maker of parts for use by vehicle and plane makers, has been battling to show shareholders that it can create more value for them with its own plan for the company since January when Melrose first approached it.

Mr Miller said: "We are nearing the end of the customary offer timetable and it is now time for you to decide".

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He added: "Melrose believes that this hasty and ill-thought-through transaction is prejudicial to GKN's shareholders".

GKN has consistently dismissed the takeover as "opportunistic" - moving to offset any shareholder interest in a sale by planning to merge its Driveline division with United States rival Dana in a deal worth £4.4bn.

The offer values GKN shares at 463.5p, after Melrose shares slipped to 222.7p in early trading.

GKN became a target following profit warnings in October and November after problems at its United States aerospace division sent shares tumbling.

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

It has gone directly to shareholders with its offer because, it said, the GKN board continued to refuse any "constructive discussions". "The GKN Board is suggesting this is the best option for shareholders, employees, pensioners and other stakeholders".

The FTSE 100 group's investors have until 13:00 GMT on March 29 to accept the current offer, which, Melrose noted, "will not be increased under any circumstances".

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