City firm dismisses predator’s GKN bid

THE battle to stop a hostile takeover of GKN received a major boost as one of the firm’s biggest shareholders backed the engineer.

Investment giant Columbia Threadneedle, GKN’s third-biggest shareholder, said it preferred GKN’s own plans to improve the business, and was rejecting City predator Melrose’s £8.1billion hostile bid.

It means five shareholders owning more than 8 per cent of GKN are now publicly backing the firm.

Richard Colwell, head of UK equities at Columbia Threadneedle, which owns 6 pc of the firm said: ‘We have been frustrated by the performance of GKN in recent years and this has necessitated fundamental changes in the company.

‘After careful consideration, we believe the actions set out by the new team at GKN present the best options for shareholders. Accordingly, we are not accepting the Melrose offer.’

Shareholders have until March 29 to decide the future of 259-year-old GKN, which makes parts for aircraft, including military jets, and cars. There is mounting opposition from politicians and unions, who are calling on the Government to intervene to block the bid on national security grounds.

The Mail has also been battling against the bid with its Save GKN campaign.

The company employs 6,000 in the UK and 58,000 around the world. Melrose is a turnaround firm which buys up underperforming businesses and sells them on at a profit, typically within three to five years. Its strategy has raised concerns for the long-term future of GKN.