D-Day looms for GKN with Melrose bid on a knife edge

TURNAROUND specialist Melrose’s controversial £8billion takeover bid for engineer GKN is set to go to the wire when shareholders cast their votes by Thursday.

Bosses of both firms are gearing up for last-ditch talks with shareholders to convince them to back their own plans to turn around the aerospace and car parts maker.

It is the largest hostile takeover bid in Britain since the takeover of Cadbury by Kraft nearly a decade ago.

Melrose began its dogged pursuit of GKN in January, but its overtures have been repeatedly rejected. It wants to eject the GKN board and revive the firm before ultimately selling it on.

GKN plans to revive the business’s fortunes by selling two divisions – including the automotive business to America’s Dana for £4.5 billion.

Analysts at Deutsche Bank have said the outcome is ‘too close to call’. They added: ‘Should Melrose’s offer be successful, we would not be surprised to see the level of acceptance only moderately above the 50 per cent plus one share threshold.’

Elliott Advisors, the world’s biggest activist hedge fund and the second-biggest GKN shareholder, has thrown its weight behind the Melrose bid. It said: ‘We acknowledge GKN management’s contribution in developing the company’s defence strategy and obtaining an improved offer from Melrose, but strongly believe the best way forward... is now as part of Melrose.’