Saturday, 24 March 2018
Latest news
Main » GKN reject takeover bid that values the company at £7bn

GKN reject takeover bid that values the company at £7bn

13 January 2018

A bid battle is now likely as Melrose, which specialises in buying struggling businesses, turning them round and selling them at a profit with the proceeds given back to shareholders, will pursue its interest despite GKN's opposition.

Shares in Melrose Industries were 10.71% higher at 238.1p in early trade on the London Stock Exchange. In 2015, Slaughters acted for the company on a £200m shares placement.

Attempted #takeover of leading UK #Engineering @GKN_plc by asset stripper melrose.

The Board of GKN has considered the Proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS Limited, and has unanimously rejected it, having concluded that the Proposal is entirely opportunistic and that the terms fundamentally undervalue the Company and its prospects.

Oil Price Hits Three-Year High
Domestic demand was also higher: US product supplied for crude oil and petroleum products was the highest level since 2007. The price of West Texas Intermediate crude in NY was $US62.67 a barrel, on Tuesday, the highest in since December 2014.

A surge in the shares of GKN has helped drive the FTSE 100 to a new all-time high afer the troubled engineering group rejected a takeover approach from rival Melrose. "In addition, the proposal would materially dilute the exposure of GKN shareholders to the meaningful upside opportunities that the board believes are present within the company".

A two-year programme dubbed "Project Boost" has been launched to "significantly" improve performance across the business.

The announcement came as the company appointed Anne Stevens as chief executive and announced its intention to restructure the business.

On the appointment of Stevens as new chief executive, the firm's chairman Mike Turner said she "has the track record to transform GKN", pointing to her "successful turnaround" of The Ford Motor Company's Mexico, Canada and South America businesses and senior roles at Carpenter Technology and Lockheed Martin.

Wall St. hits new highs on bank earnings, economic optimism
The Nasdaq composite also hit a record high, as shares of Apple gained 0.4 percent. The Dow Jones industrial average climbed 228.46, or 0.9 percent, to 25,803.19.

GKN said each business would have distinct investment profiles and capital allocation policies.

The firm also said its fourth quarter trading was in line with expectations and it therefore continues to expect 2017 management profit before tax to be slightly ahead of 2016's £678mln outcome before the additional working capital write-off in North American Aerospace announced on 16 November 2017.

Nicholas Hyett, an analyst at Hargreaves Lansdown, said the split had been "on the cards for years" because there was little crossover between the two businesses.

"The money to be made from a split is likely to have been what drew turnaround specialist Melrose to the table in the first place". "What it hasn't done is generate enough cash from those market positions", one person familiar with the company said. Today the FTSE 250 company is valued at nearly £4.4bn.

Britain's queen speaks about weight of the crown in documentary
A trapdoor used to access the secret area at Windsor Castle, where the Queen spent her war years for safety, still exists today. The story was unearthed for the documentary by Oliver Urquhart Irvine, librarian and assistant keeper of the Queen's Archives.

GKN reject takeover bid that values the company at £7bn