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Melrose presses GKN offer as Corbyn ramps up political pressure
Melrose Industries pressed the case for its £7.4bn bid for GKN as Jeremy Corbyn increased the political pressure over the turnaround company's proposed hostile takeover.
Reporting its annual results, Melrose said GKN, the FTSE 100 engineering company, needed a shake-up to improve its performance.
Melrose said: "The board believes that GKN is a company in need of fundamental change to reverse its long-term underperformance. We believe GKN will respond to Melrose's methods and deliver lasting results for all stakeholders."
The company continued its campaign to buy GKN as Jeremy Corbyn, the Labour leader, said he would be prepared to block hostile takeovers if Labour wins power. Corbyn singled out Melrose as a company with "a history of opportunistic asset-stripping".
Corbyn will tell the EEF manufacturing conference that GKN has a long record of employing people and paying tax in the UK but that Melrose's bid means "a valuable company could be sacrificed so that a few can make a quick buck". Melrose launched a formal offer for GKN on 1 February after GKN said its initial approach on 12 January was opportunistic and undervalued the company.
Gavin Williamson, the defence secretary, will face questions about the proposed takeveor at the House of Commons' defence committee on 21 February. Prime Minister Theresa May has said the government will monitor the bid after MPs raised security concerns about a buyout of GKN, which makes technology used in the F-35 fighter jet.
Melrose, which buys companies to improve their financial performance, reported a pre-tax loss of £27.6m for the year to the end of December, narrower than the £69.3m loss the year before. The company's underlying pre-tax profit rose to £257.7m - up from £96.4m a year earlier.
The statutory results were affected by restructuring costs for Nortek, the US home ventilation manufacturer it bought in 2016, and a £300m writedown on the value of its Brush business, which makes generators for the oil and gas industry.