GKN to break itself in two after rejecting bid

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Automotive and aerospace force separate says Anne Stevens

FTSE 100 group GKN, which discerns parts for F-15 fighter jets and carmakers such as Porsche, was left reeling ultimate year by a writedown at its US aerospace business, which led to it ditching its incoming chief executive Kevin Cummings.

House member Anne Stevens, who took charge on an interim basis, has now evolve into chief executive and is overseeing a restructuring of the group to boost its performance.

GKN pull down an “unsolicited” cash and shares proposal from Melrose valuing its divide ups at 405p this week.

A deal would lead to GKN investors owning 57 per cent of the amplified company, with Melrose shareholders holding 43 per cent.

Its management unanimously rejected the “opportunistic” proposal as “fundamentally undervaluing the company and its sights”, adding: “The proposal would materially dilute the exposure of GKN shareholders to the valid upside opportunities that the board believes are present within the actors.”

GKN shares soared 87¼p to 420p amid hopes of a sweetened tender from FTSE 250 firm Melrose, which buys obligations it sees as underperforming and invests in them before returning value to shareholders when stocked. Melrose shares rose 12½p to 227½p.

Melrose argued there determination be “significant operational and commercial benefits from Melrose’s ownership of GKN’s charges, reversing a history of GKN management not delivering on margin targets”.

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Anna Stevens, GKN billet member

It added: “Melrose believes that shareholder value see fit be maximised by it significantly improving the business prior to any separation.”

It has until February 9 to signal a firm intention to make an offer or walk away.

GKN, which currents back to 1759 and used to be Guest, Keen and Nettlefolds, has a 58,000 workforce in 30 countries.

It pull down pre-tax profit of £678 million on sales of £9.4 billion in 2016 and hinted its two-year transformation programme would “deliver a step change in profit lip and cash generation”.

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