Takeover target GKN in attack on suitor

TAKEOVER TARGET GKN has fired a broadside at hostile suitor Melrose, accusing it of making “fake” claims over its £7.4bn bid and biting off more than it can chew.

The embattled engineer, which rejected the offer on Wednesday, said Melrose had made “misleading statements” over the value premium of the bid.

GKN said the claim that the 430.1p a share price offered represented a 32 per cent increase on the price of GKN’s stock on the last business day before the approach was a “fake premium”.

In the blistering rebuttal, GKN also warned that it is “significantly” larger than any of the businesses previously bought by Melrose.

It said: “GKN’s board considers 32 per cent to be a fake premium.

“Melrose’s market capitalisation on January 5 was significantly smaller than GKN’s on the same day, Melrose is proposing to fund 80 per cent of the offer consideration in shares and Melrose brings no industrial synergies.”

GKN said it believed the “true premium” is less than 11 per cent.

It added: “GKN is more than five times larger than any of Melrose’s prior acquisitions by revenue. Melrose has very limited experience at board level of managing Tier 1 aerospace and automotive suppliers.”

Melrose has swooped on GKN after profit warnings in October and November.