Airbus slams Melrose after being left in dark over GKN

Melrose’s takeover bid for GKN was dealt a blow on Thursday after its biggest customer Airbus hit out at the hostile bidder’s failure to explain its plans.

GKN shares shed 1.4%, losing 6p to 431.6p, after the Toulouse-based giant said it was likely to scrap future deals with a Melrose-owned GKN because of “shorter-term” investment horizons.

The intervention is likely to raise pressure on Mayfair-based Melrose to soothe concerns among customers as it also lobbies politicians, unions and shareholders. “It would be practically impossible for us to give any new work to GKN under such an ownership model when we don’t know who will be the long-term investor,” said Airbus’ chief operating officer Tom Williams.

Last month, the aerospace business’s chief executive Tom Enders said he wanted to “understand” what a takeover of GKN meant.

The aerospace giant represents 20% or £650 million of GKN Aerospace sales last year. Airbus also sold a wing component factory in Filton to GKN in 2008.

City sources said Airbus had decided to speak out publicly because of a perceived lack of engagement by Melrose, which had left the firm “uncomfortable” with its ownership model.

“It’s a very significant intervention from Airbus,” aerospace analyst Howard Wheeldon said.

“The Melrose bid has created instability and the one thing you don’t want is instability in customer relationships… I wouldn’t be at all surprised if Airbus was followed by other customers.”

Melrose is now expected to meet Airbus this month after arranging a meeting last week.

Chairman Chris Miller said: “We will be delighted to explain to all customers and stakeholders why Melrose’s ‘invest as if we were to own the business forever’ approach is the right way forward for GKN.

“We look forward to explaining these benefits to customers as the bid timetable progresses.”

The delay in talks is thought to relate to the timing of the official bid, which was only made formal on Monday.

GKN’s chairman Mike Turner said Williams’s comments “stress the need for long-term investment and strategic vision”.