GKN rejects takeover from Melrose, to split in two

GKN makes parts for the F-15 fighter jet

Shares in the company were up almost 24 per cent at 412.2p at the time of writing.

Attempted #takeover of leading UK #Engineering @GKN_plc by asset stripper melrose.

The proposal included a breakdown of the funding of the deal, whereby 80% would be in new Melrose shares and 20% in cash.

GKN says Melrose's "preliminary and unsolicited" offer to purchase the entire shareholding was "entirely opportunistic", and that the terms "fundamentally undervalue the company and its prospects".

GKN also announced that the Board believes separating the Aerospace and Automotive businesses will help maximise shareholder value by setting distinct strategic, operational and financial objectives for each business.

The firm issued a profit warning in October over problems at its aerospace division. The biggest factory, in St Louis in Missouri, makes air frames for F-15 and F/A-18 fighter jets.

The downturn led to the dismissal of the Aerospace head, Kevin Cummings, who had been due to takeover as the future group chief executive in January. Now Stevens, a former senior executive at Ford, has been handed the job permanently.




A brief trading statement accompanying the announcement confirmed that the group continues to expect profit before tax for the year to be slightly ahead of last year's £678m.

Hyett said: "A takeover offer, subsequent rejection, new CEO, transformation strategy, trading update and planned separation of the business all in one go - it's hard to describe GKN as a Mondeo now!"

GKN said on Friday it had now appointed Anne Stevens to run the group on a permanent basis after she took up the role of interim CEO in November.

GKN also announces that Anne Stevens, now its interim chief executive, has agreed to take over as the group's new chief executive with immediate effect.

Under the stock market rules, Melrose is now required to either announce a firm offer by 5pm on 9 February, or announce that it is no longer interested.

"The separation of the automotive and aerospace units has been on the cards for years, with little obvious cross over between the two businesses". It is now valued at more than £4bn, having returned £4.4bn to shareholders since its formation.

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