Takeover firm chasing GKN made £28m loss
A PREDATORY firm plotting to snap up British defence giant GKN suffered a £ 28million loss last year.
Financial results for turnaround company Melrose also showed it has presided over factory closures and hundreds of job cuts.
its annual loss for 2017 was fuelled by problems with power generation firm Brush, which it took over a decade earlier.
Yesterday’s figures will add to questions about Melrose’s suitability to own GKN, a key supplier to defence and aerospace industries with more than £9billion sales.
Melrose has made a £7.4billion offer for GKN, which has 58,000 employees worldwide including 6,000 in the UK, and makes key parts for fighter jets, airplanes and cars.
But the bid has been rejected by GKN bosses as cheap and opportunistic, triggering the biggest hostile takeover battle in a decade and calls for the Government to intervene.
Last night it emerged alex chisholm, permanent secretary for the business department, will be quizzed about the bid today by the commons business committee.
defence Secretary Gavin williamson will face questions from the defence committee.
Melrose insisted it remains well-placed to push ahead with its offer. chairman christopher Miller said: ‘Substantial long-term value is being created with significant investment in new technology, new products and operations.’ The financial woes at Melrose stem from a takeover of engineering group FKI in 2008, which included buying Brush.
Yesterday Melrose revealed it was writing off £144.7million in value from this division, including £31.1million on the closure of its factory in changshu, china. Melrose said Brush’s generator sales fell 43 per cent last year.
The results revealed up to 270 jobs are at risk at Brush’s factory in Loughborough. it is also closing its production facility in Ridderderk, netherlands, and shifting work to the czech Republic.
Elsewhere, Melrose closed loss-making operations in the heating and ventilation division of nortek, the US manufacturer it bought in 2016.
a Melrose spokesman said: ‘Brush remains a fine business which we are happy to support … The real number investors will focus on is the dramatic increase in underlying profits and the near doubling of the dividend, which reflects our confidence in the progress being made at nortek.’