GKN battle rumbles on with fresh war of words

GKN has written to shareholders to warn over the “entirely opportunistic” takeover bid by Melrose, saying its inexperienced management team and short-term business model are “inappropriate” for the business.

The engineering giant’s letter detailed shortcomings in Melrose’s £7.4 billion offer while highlighting the benefits of its new strategic plan.

“The Melrose offer is not a good deal – it is low price and high risk,” the letter, signed by GKN chairman Mike Turner, said.

He also pointed to Melrose’s “weaker” credit profile and “materially higher proposed leverage” as a point of risk for shareholders, while claiming that the turnaround specialist’s management team “lacks relevant experience” and that “its short-term business model is inappropriate for GKN”.

Melrose chair Christopher Miller said GKN’S letter was “another attempt to distract from the real issue”, adding that Melrose had a proven track record in building up sustainable businesses.