GKN's rival suitors offer incentives to win support

FRANKFURT: GKN Plc’s rival suitors offered additional sweeteners to win over the UK aerospace supplier’s shareholders, who are set to decide next week which side to support.

Dana Inc pledged to trade its stock in London following the US company’s planned takeover of GKN’s automotive unit, it said in a statement yesterday.

Melrose said separately that it would bolster GKN’s pension plan, while easing acceptance terms for its hostile bid to 50% plus one share from its original 90% target.

The measures are aimed at shoring up weaknesses in the duelling proposals that will determine GKN’s future.

Management of the Redditch, England-based company opposes the £8.1bil (US$11.3bil) offer from investment firm Melrose, arguing that investors have more to gain if they stick with management’s turnaround plan.

As part of its defence, GKN set in motion plans for a break-up, agreeing earlier this month to sell its automotive unit to Dana in a US$6.1bil transaction.

Dana, which will rename itself Dana Plc following a combination with the automotive business, said it planned the secondary UK listing following talks with GKN shareholders.

A London listing will offer shareholders “an opportunity to share in the success of the new company, including value created through the delivery of US$235mil in annual synergies,” Jonathan Collins, chief financial officer of Maumee, Ohio-based Dana, said in the statement.

Melrose said it was proposing an injection of as much as £1bil into GKN’s pension programme and reiterated that its bid is “clearly superior to the hasty breakup” that the UK auto and aerospace components maker is planning.

The deadline for shareholders to accept its bid is March 29. — Bloomberg