GKN retracts claim over investor support

Takeover target GKN has retracted comments hinting at shareholder support for management just days before a crucial vote on the £8 billion hostile bid by Melrose, as a friendly US bidder yesterday increased its offer for GKN’S auto business.

The company was challenged by the City Takeover Panel over comments made to weekend newspapers which also alluded to investor backing for GKN’S deal to sell off its Driveline auto business

GKN boss Anne Stevens was cited in the articles as saying she was convinced investors would back GKN as it fights the Melrose bid. And group finance director Jos Sclater said that “long-only shareholders are mostly supportive of existing management, and understand that the Dana deal and becoming a pure play aerospace company has, longer term, significantly more value than the Melrose bid”.

GKN investors have until 1pm this Thursday, 29 March, to cast their ballots on the controversial deal – though news yesterday that US firm Dana has now upped its offer for GKN’S auto business has increased the stakes ahead of the vote.

Dana raised its cash offer by $140 million US (£100m), bringing the total cash consideration to $1.77bn.

Commenting on the sweetened deal with Dana, GKN chairman Mike Turner said: “This transaction, which along with Project Boost was initiated prior to the Melrose bid, offers by far the best strategic route forward for GKN Driveline.” He added that GKN had a“clearplanfordelivering leading margin performance”. 0 ‘Clear plan for delivering’– Mike Turner