Melrose wins £8.1bn hostile battle for engineer GKN

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The headquarters of GKN is seen in Redditch, Britain, March 12, 2018.

Melrose, a United Kingdom turnaround specialist, on Thursday said that 52.4 percent of GKN's shareholders had accepted its hostile cash-and-shares offer by the time the deadline for a deal expired at 8 a.m.

The turnaround specialist narrowly clinched the deal, having set its acceptance condition for the takeover at 50 percent plus one share.

It means Melrose has triumphed with Britain's biggest hostile bid since Kraft pounced on confectionery giant Cadbury in 2009.

GKN, led by chief executive Anne Stevens, had put up a staunch defence that included striking a separate deal to merge its autos division with USA firm Dana, a tie-up that was dependent on the failure of the Melrose takeover.

"Christopher Miller, chairman of turnaround investor Melrose said he was "delighted" to have been backed by GKN investors for what he called his company's plan to create a "£10bn United Kingdom industrial powerhouse". Its offer is now expected to become unconditional by April 19.

Jack Dromey, an MP who led political opposition against Melrose, said it was a "bleak day for British industry".

Melrose must also now keep its promises, after it made legally binding commitments to business secretary Greg Clark yesterday to maintain research spending and keep the business based in the UK.

The trustees of GKN's pension plans said they were looking forward to working with Melrose.

Shares in GKN finished up 9.5 percent at 463 pence.

Despite Melrose's victory, GKN said it still believed the bid "fundamentally undervalues" its business.

Melrose plans to delist the company if it secures support from 75 percent of shareholders, which would leave investors who have still not backed the offer with a stake in an unlisted business. He added the USA firm still believed it was "the best owner and operator" of GKN's auto parts business.

It is possible that Dana could revive a deal for the business with Melrose in the future, a source close to GKN said.

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