Melrose Industries has stressed its commitment to improving “not only GKN, but the UK economy” in comments that its takeover target said smacked of desperation ahead of a crucial shareholder vote.
GKN’s chairman hit out at Melrose as it made last-ditch efforts to convince investors that the firm would thrive under the leadership of its own management as part of an £8.1 billion acquisition.
The UK engineering firm’s boss, Mike Turner, said: “This morning’s blizzard of announcements by Melrose, drafted in increasingly hysterical language, smacks of desperation.
“Over the last three months, it has become clear to GKN that Melrose’s attempts to engage with a broad group of GKN’s stakeholders – its customers, its employees, its pensioners, regulators such as CFIUS and most recently the UK Government – have been hurriedly conducted and demonstrate a lack of care and preparation.
“Each one of these areas represents future risks that go to the value of the Melrose offer.”
He hit out at what he called a “costly last-minute agreement” on pensions, and Melrose’s willingness to commit to owning GKN’s Aerospace division for at least five years in order to assuage Government concerns over short-term interests.
Mr Turner said the concessions “significantly limited” Melrose’s flexibility to develop the business and ultimately impact its value, saying the unit would fare better under its own plans to be a “separately quoted, pure play aerospace business which is free of the constraints that Melrose are now accepting”.
He added: “This is what we are offering to shareholders. We built this world class business over many years and are totally committed to developing it in a manner that maximises value for our shareholders.”
It marks the latest salvo in a tit-for-tat battle over Melrose’s hostile bid ahead of the much anticipated shareholder vote.
GKN investors have until 1pm on March 29 to cast their ballots on the controversial deal.
The comments come after Melrose followed up on an exchange of letters with Business Secretary Greg Clark, whose calls for “binding” agreements over its proposals for GKN sparked a raft of assurances from Melrose a day earlier, including plans to keep the firm listed and headquartered in the UK.
“Melrose fully stands behind its plan to work for the improvement of not only GKN, but the UK economy as well,” the company said in a statement on Wednesday.
Melrose said its “constructive discussions” with the Government minister and the exchange of letters demonstrated a commitment to GKN “that its current board sadly lacks”.
Melrose said earlier this week that it was ready to make a five-year commitment to the business, having agreed with the Takeover Panel to maintain its UK listing and headquarters and ensure that a majority of its directors are resident in the UK.
It would also make sure that the Aerospace and Driveline divisions retain the rights to the GKN name and maintain GKN’s current level of research and development investments.
That was alongside a pledge to guarantee it would not sell the Aerospace Division before April 2023.
Melrose’s letter responded to a number of Mr Clark’s concerns, having also called for GKN to continue as a UK taxpayer, pay suppliers promptly, make arrangements for current and future pensioners, and invest in the training and development of the workforce.
He also stressed that a short-term approach would not be in the best interests of defence and national security, adding that he would like Melrose to rule out a short-term sale of the business barring Government consent.