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It is a company that dates back to Britain’s industrial revolution: an ironworks in south Wales that started in 1759 and supplied the tracks for Brunel’s Great Western Railway. It has become, as GKN, a global engineering giant supplying car and aerospace parts, employing 60,000 around the world and 6,000 in the UK. But now corporate raiders loom in the form of a controversial £7.8bn hostile bid – in which Theresa May’s government has been sidelined, despite its aspiration to develop a new UK industrial strategy.
Bidder Melrose has set a deadline of 1pm on Thursday for GKN shareholders to accept or reject its largely paper-based bid. Insiders describe the situation as finely balanced. Melrose, which is about the fifth of the size, says GKN has lost its way, repeatedly missing profit targets; it says its approach of buying underperforming businesses, restructuring them and selling them on in three to five years will generate far more value. As of Friday, just under 10% of GKN shareholders were backing the Melrose bid, broadly in line with the 9% support for the GKN board.
Continue reading...Slightly larger shareholder base has come out so far in favour of hostile bid than backs GKN board
GKN shareholder Elliott Advisors has said it backs a £7.8bn bid by Melrose for the British engineering firm, as the clock ticks down to next week’s deadline for investors to decide on the hostile takeover bid.
Elliott, which has a 3.8% shareholding, told GKN’s management it did not trust it to deliver the “profound cultural shift” needed to meet new targets while driving through two deals. The move means that just under 10% of GKN’s shareholder base has come out in favour of the hostile bid, neck-and-neck with the 9% backing GKN’s board.
GKN is a global engineering business based in Redditch, Worcestershire. It employs nearly 60,000 people across 30 countries.
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