Melrose chiefs to strike it rich
Bosses could be quids in after GKN deal
FATCATS have admitted they could pocket a “substantial sum” of money by snapping up the engineering giant GKN.
Bosses at turnaround firm Melrose told MPs yesterday they would trouser windfalls by boosting GKN’s fortunes.
But they were slammed for snubbing unions representing GKN’s 6,000 UK workers.
Melrose has made a £7.4billion hostile bid for GKN, which makes technology for fighter jets and car makers. It has 58,000 staff worldwide. The deal includes £3.5bn of debt, Melrose’s three co-founders told the Commons Business Select Committee yesterday.
Executive vice-chairman David Roper insisted: “The level of borrowing is prudent.”
He denied Melrose was a corporate raider, saying: “We manage businesses as if we are going to own them forever.” Yet the committee heard that Melrose’s strategy was to sell on companies within three to five years.
Simon Peckham, Melrose chief executive, said it would sack GKN’s board, shake up its head office and delegate responsibility to divisional managers.
Labour MP Rachel Reeves, chairwoman of the committee, blasted Melrose for ignoring the union Unite’s request to meet, despite finding time for US regulators and others.
Peckham committed to do so “in the next few weeks”, despite an Easter deadline for the bid. And chairman Christopher Miller confirmed 20 Melrose bigwigs could be quids in through the acquisition. He said: “If we are very successful with GKN it could be a substantial sum of money.”
Miller, Peckham and Roper are already in line to make £40million each this year alone. Unite assistant general secretary Steve Turner backed calls for Business Secretary Greg Clark to block the takeover. He accused Melrose of being an asset stripper, adding: “They take over businesses, break businesses up, they compartmentalise them and then flog them off to the highest bidder.”
GKN bosses Anne Stevens and Jos Sclater earlier accused Melrose of “short-term capitalism”, insisting the GKN board already had a turnaround plan in place for the business.