Warplane maker shoots down derisory £7billion takeover bid

DEFENCE titan GKN has slammed as derisory a £7.4bn hostile bid from turnaround specialist Melrose.

New boss Anne Stevens said Melrose was trying to pick up GKN on the cheap and insisted her own plan would give its profits a boost.

Melrose is battling to win support from shareholders for its 430p per share offer, amid fears from unions and MPs it could damage the firm.

It marks the first major hostile takeover in the UK since Kraft’s swoop for Cadbury in 2006. The Government is understood to have held talks with both sides.

GKN employs around 9,000 in the UK and more than 58,000 around the world, with clients including UK and US militaries, and Airbus.

Melrose sells firms on at a profit within three to five years of taking them over, having so far sold most of Leicestershirebased FKI, manufacturers Dynacast and McKechnie, and German firm Elster.

Yesterday chairman Christopher Miller, 66, said Melrose planned to ‘declutter’ GKN, slash staff and speed up decision-making.

It plans to sell smaller GKN businesses in aerospace and automotive as well as, in the medium term, consider selling its powder metallurgy division.

Melrose plans to work out what to do with other parts of the business after improving them, including possibly separate listings, Miller added.

But GKN said Melrose was not the right owner for the engineering firm and its offer is more like a 10.4pc premium, not the 28pc claimed. It added: ‘It lacks experience in relevant high technology business. GKN is a more complex business than anything acquired by Melrose in the past.’ Stevens, 69, was promoted to the top job at GKN after incoming chief executive Kevin Cummings stepped down following a profit warning and US accounting scandal that hit shares. She said: ‘This offer is derisory. Melrose is trying to buy GKN on the cheap when our company is beginning to reap the benefits of its long-term investment.’

Unite union’s Steve Turner said: ‘GKN is one of the last UK manufacturing powerhouses. The Government has to intervene, to say it cannot let it be picked off by the private capital vultures.

‘Unless it does so, we know how this story will end because we’ve seen it happen all too often before – a great UK brand is piled high with debt, its assets sweated by far off, unseen owners and the community and workforce lose out.’