Search Share Prices
Melrose restates GKN potential as offer goes unconditional
Melrose Industries said an early review of GKN confirmed its potential for improvement as Melrose's £8bn offer for the engineering company became unconditional.
The turnaround specialist published its update as the government was reported to be ready to approve the contentious takeover.
Melrose said it issued new shares on 18 April that were swapped for GKN shares representing about 85% of GKN's voting rights. The cash element of its offer will be paid no later than 3 May for acceptances received by midday BST on 18 April.
Melrose fought a bitter battle to acquire the automotive and aerospace engineer against opposition from GKN's board, trade unions and politicians including Michael Heseltine, the former Conservative trade secretary. Melrose said it could revive GKN's fortunes but its opponents accused it of being a short-term opportunist.
The government is likely to wave the acquisition through after deciding it raised no national security concerns, the Financial Times reported. Gavin Williamson, the defence secretary, and Greg Clark, the business secretary, will seek extra guarantees about GKN's defence work before approving the deal, the FT said.
Melrose said its early review of GKN confirmed its belief that the business could be overhauled for the benefit of shareholders and other stakeholders. It plans to update investors on GKN's trading on 24 April and to publish a comprehensive review at Melrose's interim results in early September.
Christopher Miller, Melrose's chairman, said: "Today sees the formation of a new manufacturing powerhouse, headquartered in the UK and with diverse operations around the world.
"The knowledge and vision of the GKN teams will find full focus under Melrose and together we will transform the prospects of the business. We have begun our in-depth review and this has confirmed our expectations about the size and scale of the opportunity to create lasting value."