Melrose Industries has turned up the heat in its bid to acquire fellow UK-listed firm GKN, appealing to the latter´s shareholders in a hostile approach.
Engineering group GKN, meanwhile, appeared to be limbering up for a concerted fight as it issued its own appeal for its investors to reject the deal. It follows the GKN board´s rejection of the offer last week.
Melrose, a turnaround specialist known for its focus on industrial companies, pointed out that GKN shareholders would now be getting an even better deal given the recent rise in the value of Melrose shares.
“Since our approach was announced, the Melrose share price has risen as the market digests the attractive opportunity our proposal represents. As a result, the implied premium has grown from approximately 24% to approximately 32% since our approach,” said Simon Peckham, chief executive of Melrose in a statement.
Melrose is offering 1.49 of its own shares per GKN share, valuing each GKN share at 430.1p. The offer values GKN´s equity at £7.4bn.
As at 1125 GMT on Wednesday GKN´s shares were trading at 440.7p, down 0.3% on the session. Melrose was trading 230.5p, 1.6% lower on the day.