Cash Will be Offered to Investors By GKN to Fend Off Melrose Bid

By RobMag66 (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

A cash payout is expected to be offered by GKN during the coming week as it attempts t fight off a hostile takeover bid.

The engineering company is believed to have drawn up a document of proposals in order to placate the shareholders in the midst of a £7.4bn bid from Melrose.

The Sunday Times was the first to release the report. The newspaper also said that the group had promised to place its metallurgy business up for sale and decrease costs in order to finance a plug for the £1.1bn deficit in the pension scheme of the group and a payday for investors.

GKN refused to comment on the matter.

The company was thrown into chaos in 2017 by the stepping down of its new chief executive before he had even began to assume his post, is trying to convince investors to oppose the bid, which it has dubbed as “derisory.”

Read more: US Congressman: Melrose Bid for GKN is a Security Risk

The news arrives after a congressman in the United States released a statement over the weekend that Melrose’s bid could pose a risk to security.

Neal Dunn send a letter to the Committee on Foreign Investment in the United States, saying that the buyout attempt of Melrose could threaten the ongoing secret programmes in the US air force for which GKN is currently a supplier.

Politicians in the United Kingdom have also heightened alarm bells, with the chairperson of the influential cross-party business committee noting “serious concerns” over the said deal.