"The board now recommends that, in the event that the offer is declared wholly unconditional by Melrose, shareholders accept the offer, as the GKN directors intend to do in respect of their own beneficial holdings," the British engineer said late Thursday in response to level of acceptances for the bid.
GKN's board, however, also said that Melrose would delist the company, if the level of acceptances reaches 75%. This could leave shareholders with a minority interest in an unlisted company, with the liquidity and marketability of GKN shares significantly reduced as a result.
GKN shares closed up 9.0% at 460.908p each on Thursday, the best performer in the FTSE 100, while Melrose shares closed at 230.34p, up 3.2%.
GKN's statement comes after Melrose earlier on Thursday said its takeover bid for GKN has received valid acceptances from around 52.43% of the voting rights of GKN, and accordingly its merger offer has become unconditional as to acceptances.
"Let me assure you that GKN is entering into very good hands," Melrose Chairman Christopher Miller said.
"We are delighted and grateful to have received support from GKN shareholders for our plan to create a
"Melrose has made commitments as to investment in R&D, skills and people and we are very excited about putting these into action," he added.
As at 1300 BST, Melrose had received valid acceptances of its offer in respect of 901.3 million GKN shares, representing around 52.43% of the voting rights of GKN. Melrose said it is so far aware that none of the acceptances has been received from persons acting in concert with Melrose or in respect of shares subject to an irrevocable commitment or letter of intent.
On Tuesday, the
"I am concerned that a short-term approach to ownership may not be compatible with maintaining the longer-term relationships which characterise the best interests of the defence field. In the light of this I would expect to see a commitment to continuity of ownership and strategic investment specific to the defence related business of GKN and to exclude the option of a short-term sale of this business without the consent of the government. I am aware that you are separately discussing with the Ministry of Defence the terms of an agreement that would satisfy any concerns that the Defence Secretary may have," Clark said.
Clark's letter to Melrose seeking specific commitments relating to its GKN bid was published on Tuesday.
In response, Melrose said Tuesday that it has agreed with the
GKN late Tuesday hit back saying the need for the
Melrose has committed not to sell the GKN Aerospace business before April 1, 2023, but it has not made any commitment about the future of GKN Driveline, GKN said.
"In other words, the future of GKN Driveline becomes immediately uncertain under Melrose's ownership in contrast to its certain future under the Dana/GKN Driveline combination," GKN said. It added that Melrose's pension proposal would create a group with high leverage and leave gross pension liabilities in excess of
"The fact that Melrose appears to have been forced into these undertakings shows once again that it would be an unsuitable owner of GKN," GKN Chief Executive Anne Stevens said on Tuesday.
