Despite only 52.4 percent of shareholders agreeing to the takeover, Melrose Industries has made a successful bid of £8 billion (US$11 billion) to take over the British engineer GKN after a bitter three-month-long battle. This has been seen as the largest successful hostile bid since Kraft took over Cadbury in 2009.
Melrose is a UK-based turnaround specialist and the greatest fears have been that if successful, Melrose would divide up the company and sell off individual elements. Among other things, the GKN makes doors for Volkswagen and components for aircraft including the Eurofighter Typhoon. Melrose's motto is “Buy, improve, sell”.
While there has been considerable concern over a compromise to national safety if the aerospace arm of the business were to be sold off to an overseas investor, it is understood that while a promise has been made that the combined firm would remain headquartered in the U.K. Melrose has also made a series of legally binding commitments about GKN's future this week, including pledges on research and development expenditure.
Business minister Greg Clark said on Thursday that Melrose is “bound to honor” those commitments.
“Now that shareholders have made their decision the government has a statutory responsibility to consider whether the merger in its proposed final form gives rise to public interest concerns,” he added.
“This assessment will be made by the appropriate authorities and the conclusion set out in due course.”
Despite Melrose's victory, GKN said it still believed the bid “fundamentally undervalues” its business.
Melrose shares closed up 3.4 percent at 231 pence (US$2.84), lifting the value of its offer for the engineer to about 471.4 pence (US$5.80) per GKN share. That values GKN as a whole at about 8 billion pounds (US$11 billion).
Shares in GKN finished up 9.5 percent at 463 pence (US$5.70).
According to Reuters, Melrose plans to delist the company if it secures acceptances from 75 percent, which would leave investors who have still not backed the offer with a stake in an unlisted business.
