GKN fights back against Melrose’s ‘fake premium’

The gloves are off in the battle for GKN after the FTSE 100 takeover target slammed Melrose’s hostile bid to buy the company on Thursday as a “fake premium” and cast doubt on the experience of its management.

The engineering giant questioned Melrose’s claim the £7.4 billion bid was 32% higher than the market value of GKN, suggesting the cash-and-share offer was only 11% higher.

The firm, founded in 1759, also implied new chief executive Anne Stevens was more experienced than the Melrose management team, led by chief executive Simon Peckham and executive chairman Christopher Miller.

“Melrose has very limited experience at board level of managing tier 1 aerospace and automotive suppliers,” the company said.

Stevens, who was caretaker manager of GKN and was swiftly made permanent after the Melrose bid, was chief operating officer of Ford America and led US alloy maker Carpenter Technology

The two management teams are touring the City to woo fund managers with their vision for the firm. Both want to split the aerospace division from the car unit, but shareholders have to pick who they want to do it.

GKN shareholders have been offered 430.1p per share, made up of 81p in cash and the rest in Melrose shares.