Melrose shows cool head in battle for GKN

Melrose specialises in buying industrial companies before improving them and selling them off

The board of FTSE 100 engineering firm GKN has rejected a "final offer" worth £8.1bn in a hostile takeover attempt by Melrose.

GKN in a separate statement on Monday said that its board "continues to view the offer as entirely opportunistic and believes that its terms fundamentally undervalue GKN and its prospects".

But Melrose declared its sweetened offer as "final", meaning it can not improve the terms further under British takeover rules.

Earlier, Melrose set out the terms of its increased bid - at 467p per share - which would give GKN investors a 60% stake in the expanded Melrose. Melrose shares tumbled 3 percent.

Melrose said the new offer (81 pence plus a 1.69 new Melrose share for each GKN share) won't be increased under any circumstances.

Just Eat fell over 4 percent on a brokerage downgrade.

After the new offer, shares remained fairly stagnant were up less than 2 percent in early trading.

A letter, which was initiated by Labour MP Jack Dromey and Conservative MP Rachel Maclean, raised fears that GKN would be broken up and sold owners overseas.

Last week, GKN agreed to combine the driveline business to US-based Dana Inc in a US$6.1 billion transaction aimed at repelling its suitor.

It said all recent attempts to engage in "constructive discussions" with GKN have been blocked.

GKN has rejected Melrose's revised and final takeover bid.

"It was a little bit better than we thought", he told Reuters.

The engineering firm, which can trace its roots back to 1759, is attractive to buyers because of its involvement with growing aircraft programs such as the A350 and the A320, and in cars, where it has been growing market share and supplies manufacturers including Fiat Chrysler and VW Group.

"GKN is one of the most prominent engineering firms in the United Kingdom, the third biggest in our country".

GKN shareholders have until March 29 to decide whether or not to accept the offer.

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