>>> GKN bidder Melrose says GKN board plans to sell up to 90% of group

GKN bidder Melrose says GKN board plans to sell up to 90% of group
29 MAR 2018
GKN [LON:GKN] bidder Melrose Industries [LON:MRO] has challenged the FTSE-100 engineering group’s board to deny plans to sell 90% of the company, The Times reported.
The report cited Melrose’s final statement on its hostile takeover bid for GKN on Wednesday, 28 March, in which Melrose said:
“Despite promising to "improve, grow and develop" the businesses, the GKN Board now appears to intend selling up to 90% of the entire company”
According to The Times, Melrose challenged the GKN board to deny that they plan not only to sell the company’s automotive components arm Driveline to Dana Corp [NYSE:DAN] but also its powder metallurgy operations and the parts of its aerospace operations not involved in engine production. GKN has already announced that an agreed sale of Driveline to Dana and has previously indicated plans to sell its powder metallurgy arm.
No denial was forthcoming from GKN, which instead retorted that it had not been forced to make similar commitments to Melrose’s promise to maintain British ownership of GKN, the report said. Melrose this week made a commitment to the UK government that it would not dispose of GKN’s Aerospace arm without the government’s permission before 2023.
Melrose's statement referred to an interview with GKN finance director Jos Sclater in the Financial Times on 21 March, in which Sclater said splitting off GKN’s aerospace structure operations - which makes components for wings and fuselages - was a definite possibility in the future.
GKN would not comment on its intentions with regards to its aerostructures operations beyond its most recent formal response, The Times reported. GKN said Melrose’s commitment not to sell the aerospace arm for five years had limited “strategic flexibility.”
A Financial Times report on 28 March cited people close to the bid who suggested that GKN will probably lose, as more than 20% of the company’s shares are in the hands of short-term shareholders.
The deadline for GKN shareholders to accept Melrose’s offer is 1pm on Thursday.
GKN’s share price closed 7.3p down at 423.0p in London on Wednesday, giving the company a market capitalisation of GBP 7.27bn (EUR 8.30bn).