£1bn sell-off fuels GKN takeover bid

PREDATORY turnaround firm Melrose is planning to offload one of its divisions as it ramps up its £7.4bn fight for engineer GKN.

Melrose is expected to confirm plans this week to sell Ergotron, part of US security and ventilation firm Nortek it bought in 2016, for around £1bn.

With proceeds expected to be handed back to investors, the sale of Ergotron would be seen as the latest charm offensive in an increasingly bitter battle to win over GKN shareholders.

Engineer GKN dates back 259 years and made cannonballs for the British Army during the Napoleonic Wars. It now makes parts for a number of military programmes, including fighter jets, as well as civilian car and plane manufacturers.

Amid rising concerns for national security implications on both sides of the Atlantic if Melrose’s GKN bid is successful, US and UK politicians are already scrutinising the deal and Prime Minister Theresa May has been called upon to intervene.

GKN’s board has criticised the Melrose bid – which consists of 1.49 new Melrose shares and 81p in cash for each GKN share – as ‘low price and high risk’.