One of the UK’s biggest engineering firms, Redditch-headquartered GKN, has rejected a £7 billion takeover bid by Melrose, a manufacturing turnaround firm.
The GKN Board unanimously rejected the bid, calling it ‘entirely opportunistic’ and a big which ‘fundamentally undervalued’ the company and its prospects.
In 2017 GKN launched wide-ranging review to improve profit margins and cash generation. ‘Project Boost’ is a two-year programme to improve cash and profit that will incorporate all areas of the business.
GKN is a global business which designs, manufactures and services systems and components for most of the world’s leading aircraft, vehicle and machinery manufacturers. Founded more than 250 years ago, it has grown into a £9.4 billion business. The company operates three divisions: GKN Aerospace, GKN Driveline and GKN Powder Metallurgy and employs around 58,000 people across the world (6,000 in the U). Through ‘Project Boost’ GKN is now creating differentiated product segments that will be classified as either core or non-core.
Trading during the final quarter of 2017 was in line with expectations, and the Group says it expects profit before tax to be slightly ahead of 2016 (which was £678 million).
Melrose hasn’t given up and plans to meet GKN shareholders to convince them of the benefits of its takeover offer.