Top GKN backer says offer by takeover suitor Melrose is too low

A top GKN shareholder has called for a higher bid for the firm, saying Melrose’s current offer is too low.

Sanderson Asset Management, a top 15 shareholder based in London, said GKN is worth 500p a share, valuing the company at almost £8.6 billion.

Melrose’s offer — 430.1p, made up of 349.1p in Melrose shares and 81p in cash — has been rebuffed by GKN.

“We believe GKN’s stock is currently worth £5, so consider Melrose’s offer is too low,” Sanderson chairman and chief executive Tim Sanderson said on Friday.

Other GKN shareholders such as Standard Life Aberdeen, which also owns Melrose shares, and Vulcan Value Partners have signalled backing for the Melrose offer.

Both GKN and Melrose are battling to convince shareholders they are best-placed to extract value from the engineering conglomerate but Sanderson added that the issue was a “moot point”.

“Melrose has an excellent track record but the incumbent management know the business well and have built very strong market positions. We’re still weighing this up,” he said. “Incidentally, we’re less concerned about the funding of the pension-fund deficit than other commentators seemed to be.”