Melrose the buyout group founded in 2003 has succeeded in a £8.1 billion hostile takeover of GKN
United Kingdom engineering company GKN Plc lost a hard-fought battle for independence after shareholders opted for a 8.1-billion-pound ($11.2 billion) offer from Melrose Industries Plc in a takeover that attracted scrutiny from government, a key customer and unions.
In a statement released at 4pm on Thursday Melrose revealed that it had won the support of approximately 52.43% of GKN investors for its proposed £8.1bn cash and shares offer.
The tally just surpassed the acceptance threshold of 50 percent plus one share that Melrose had set for the takeover of the aerospace and automotive parts supplier.
It means Melrose has triumphed with Britain's biggest hostile bid since Kraft pounced on confectionery giant Cadbury in 2009.
That tie-up was dependent on the failure of the Melrose takeover and Dana said its deal was now "unlikely" to proceed.
"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", it said in a statement.
GKN shares shot up over 9 percent in late afternoon trading.
The turnaround specialist's motto is "buy, improve, sell" which provoked fears among some lawmakers about the security of GKN's 6,000 British employees and the future of the engineering firms pension plans.
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Given GKN's history, the efforts of Greg Clark, the business secretary, to extract binding guarantees from Melrose were understandable if last-minute.
Meanwhile, the chief executive of Ohio-based Dana, James Kamsickas, said he was disappointed by the outcome.
Clark's letter to Melrose seeking specific commitments relating to its GKN bid was published on Tuesday.
"We are looking forward to working with GKN's talented workforce and to delivering for customers and all stakeholders".
GKN late Tuesday hit back saying the need for the United Kingdom government to intervene and seek commitments from Melrose over its hostile bid is further evidence that Melrose is the wrong owner for this business and that shareholders would be taking a risk in accepting the offer.
GKN became a target following profit warnings in October and November after problems at its U.S. aerospace division sent shares tumbling.
Despite Melrose's victory, GKN said it still believed the bid "fundamentally undervalues" its business. He added the USA firm still believed it was "the best owner and operator" of GKN's auto parts business.
Dana Inc. announced March 29 that shareholders of the United Kingdom-based diversified manufacturer GKN plc voted to accept a rival bid for the company, ending Dana's pursuit of GKN's driveline division.
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