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A FTSE-100 company with a narrow bid-offer spread. Manufactures and supplies components and vehicle
structures to automotive, aerospace, mining and agricultural industries. Approximately 39,000 people work
in GKN companies and joint ventures in more than 30 countries

GKN corporate website - GKN investors website - Company history


(previous thread title no longer relevant, hence new thread)

StockMarketWire.com
GKN advised shareholders not to accept Melrose's hostile takeover offer as it was 'not a good deal' and represents 'low price and high risk.'

'The Board unanimously recommends that you should take no action in relation to the offer and that you should not sign any document which Melrose or its advisers send to you,' GKN said in a letter to shareholders.

GKN said that the premium Melrose is offering is 'very low,' and added that Melrose's stated premium of 22% is 'misleading' as its market capitalisation is significantly smaller than GKN's, the offer is 80% in shares, representing an actual premium of 10%.

GKN also highlighted Melrose's lack of relevant experience and said its short term business model is 'inappropriate' as the latter's three-to-five-year exit strategy is not compatible with the long-term investment and technology horizons that are essential in GKN's markets.

GNK called on shareholders to trust in the company's new strategy which aims to deliver returns to shareholders of up to £2.5bn over the next three years.

'Your Board strongly believes that GKN's new leadership team and strategy can maximise shareholder value and that, as a GKN shareholder, you should receive 100% of the benefit of this strategy.

this isn't a stock i have ever followed, but certainly the 5-year chart shows a pretty pathetic sp performance

it certainly concerns me that melrose apparently talk of a 3/5 year exit plan ..... does that smell a bit like good old-fashioned asset-stripping?

motly fool leave alone BB

StockMarketWire.com
GKN reported underlying profits before tax of £572m down 16% from a year ago while organic sales grew 6% to £10.4bn.

Profits were reduced by £145m, primarily due to the £112m balance sheet review charge and associated costs in North American Aerospace and claims of £38m. The group has announced a full year dividend of 9.3p per share, up 5% on a year previously.

The company said it expects the separation of its aerospace and driveline businesses to be completed in the middle of 2019.

"A demerger represents GKN's base case separation structure for a number of reasons, including that the timetable is within GKN's control, it allows GKN to allocate liabilities appropriately and it is tax efficient," GKN said in a statement.

GKN's aerospace division reported 2% organic sales growth but trading margin fell to 7.8% in 2017 from 9.9% the previous year. Underlying trading margin is expected to show a slight improvement in 2018, despite some further contractual price downs and increased investment in new engine programmes.

GKN's driveline division saw organic sales growth rise 9% in 2017 as its eDrive order book extended to over £2bn. The division reported a trading margin of 7.1% versus 7.2% the prior year. GKN said it expects trading margin improvements in both 2018 and 2019 as the division works toward achieving its core segment trading margin target of at least 9.5% in 2020.

Powder Metallurgy's organic sales growth was 5% for the year while trading margin fell 10.6%, reflecting higher raw material surcharge and investment in high-end powder capability in China. The division is expected to show steady progression in 2018 and 2019 as it works towards achieving its 2020 target of at least 11%.

The group said revenue expectations in the short term are unchanged.

Commenting on the results, Anne Stevens, Chief Executive of GKN said: 'GKN has fantastic businesses which have grown organically above our key markets, demonstrating once again our strong positions and leading technology.'

'However as I set out two weeks ago, we now need to change our emphasis and ensure that those orders deliver world class financial performance with a renewed focus on strong margins and cash generation.'

'With Project Boost, I have laid out how we plan to achieve this, through detailed product segment strategies and an emphasis on manufacturing and functional excellence. We are excited about delivering these plans.'

StockMarketWire.com
GKN confirmed that it has been in talks about a potential combination of its automotive business with Dana that would be 'effected mainly in equity.'

GKN said a possible combination of its automotive Driveline business with Dana could provide greater value to shareholders and should therefore be explored alongside the demerger.

StockMarketWire.com
Takeover target GKN said it had agreed to merge its Driveline automotive business with Dana Incorporated in a deal that would give the combined business an enterprise value of $6.1bn (£4.4bn).

GKN said the transaction, together with the prospects of its aerospace business, provided 'significantly greater value' for its shareholders than Melrose Industry's £7bn hostile takeover bid for GKN.

Under the terms of the deal, GKN shareholders would receive 47.25% of the fully-diluted share capital of Dana, equivalent to $3.5bn (£2.5bn), based on Dana's closing share price on 8 March.

GKN would also receive $1.6bn (£1.2bn) in cash after deducting for the transfer of $1.0bn (£0.7bn) of GKN's pension deficit to the combined group.

'This combination of GKN Driveline and Dana will create a US and UK led global market leader in vehicle drive systems,' GKN chairman Mike Turner said.

'The synergies between these two businesses and our complementary product portfolios make this a great deal for GKN shareholders.'

StockMarketWire.com
Melrose Industries sweetened its takeover bid for GKN to £8.1bn and said it would not increase its offer again 'under any circumstances'.

Melrose raised its offer to 81p in cash and 1.69 new Melrose shares for every GKN share, which it said equated to 467p per GKN share, up from a previous bid of 416p.

The new bid would also increase the proportion of ownership that GKN's shareholders would hold in Melrose from 57% to 60%, Melrose said.

GKN on Monday reiterated that Melrose's original bid 'fundamentally undervalues' the UK engineering firm.

On Friday, GKN announced that it was merging its Driveline automotive business with US-bawed Dana to form a company with an enterprise value of $6.1bn.

'The combination of GKN Driveline with Dana will result in GKN shareholders owning 47.25% of the enlarged Dana and GKN receiving net cash proceeds of £1.2bn,' GKN said.

Melrose, however, said its sweetened offer was more attractive.
'The potential transaction with Dana, if it is allowed to go ahead in the last quarter of this year, would leave you with a minority stake in a foreign listed group run by a Dana management team based in Ohio,' Melrose said.

StockMarketWire.com
GKN said Tuesday that it has a clear and comprehensive plan to reduce its pension liabilities, calling Melrose's recent warning of overburdened pension liabilities 'misleading.'

GKN said 'Melrose has not to date agreed any meaningful short-term actions to reduce the existing scheme liabilities.' The firm added that as part of the transaction with Dana, it will transfer £1,375m of gross pension and post-retirement medical scheme liabilities and £818 million of pre-tax deficit.

This comes in the wake of Melrose Industries formal proposal to inject up to £1bn into GKN's pension fund. Melrose on Monday warned GKN's shareholders that they would end up with shares in an Aerospace business overburdened with up to £3 billion of pension liabilities should they reject the takeover offer of GKN.

The firm said, however, that Melrose's £1bn plan would 'achieve less than GKN's own agreement with the Trustees, at a greater cash cost which would erode shareholder value,' and added that its shareholders 'deserve better.'

Commenting, GKN Group Finance Director, Jos Sclater, said: 'GKN has a clear and comprehensive plan to reduce its pension liabilities and eliminate the deficit in its UK pension schemes. We have a binding agreement with the Trustees which works for all stakeholders: the scheme members, the Trustees and the company and its shareholders.'

'A month ago, Melrose appeared to suggest that its plan to pay £150 million into the pension scheme was sufficient. Now it appears to have unveiled a £1 billion plan that would achieve less than GKN's own agreement with the Trustees, at a greater cash cost which would erode shareholder value. I think our shareholders deserve better.'

StockMarketWire.com
GKN said Dana on Monday increased its offer for GKN's Driveline business by $140m (£100m) to $1.77bn.

Under the terms of the deal, GKN will now receive $1.77bn in cash after deducting $1.0bn for the transfer of pension deficit to the combined Dana-GKN Driveline group.

GKN shareholders will continue to own 47.25% of the combined company listed on both the NYSE and LSE.

The firm said it intends to return up to £700m of cash to shareholders as soon as practicable following completion of the Dana-GKN Driveline transaction.

GKN reiterated that Melrose's final offer fundamentally undervalues the company and urged shareholders to reject the final offer as 'the true value of GKN is over £5 per share.'

GKN also confirmed that statements of shareholder support in respect of GKN published in The Sunday Telegraph and Sunday Times on March 25, were not verified and are therefore retracted.

The Sunday Telegraph article contained a comment by Anne Stevens, Chief Executive, that "Stevens says... she's convinced investors will back [GKN]." The Sunday Times article contained a comment by Jos Sclater, Group Finance Director, that "long-only shareholders are mostly supportive of existing management, and understand that the Dana deal and becoming a pure play aerospace company has, longer term, significantly more value than the Melrose bid."

Mike Turner, Chairman of GKN said: 'I welcome Dana's announcement today. This transaction, which along with Project Boost was initiated prior to the Melrose bid, offers by far the best strategic route forward for GKN Driveline. The challenges and opportunities of electrification mean that consolidation is required. By moving now, the Dana-GKN Driveline combination will be strongly positioned to be a global leader in this field.'

'For GKN, we believe this combination comes at an ideal time in the wider automotive cycle and, with this increase, what was already an excellent deal for both parties has just become an even better one for our shareholders. We believe that Melrose would find it extremely difficult to create equivalent value in the future from GKN Driveline if its offer were to be successful.'

it must surely be wrong for this t/o by melrose to be permitted

as i understand it, GKN is of strategic importance to uk, and there is no question but that melrose are solely after an asset-stripping exercise

Compulsory Acquisition of remaining GKN Shares 27.04.18
Melrose announces that it has now acquired, unconditionally contracted to acquire or received valid acceptances of the Offer in respect of more than 90 per cent. of the value of the GKN Shares to which the Offer relates and more than 90 per cent. of the voting rights carried by such shares. Accordingly, Melrose will now begin the implementation of the compulsory acquisition procedure under Chapter 3 of Part 28 of the Companies Act 2006 (the "Act") to acquire the remaining GKN Shares which it does not already own or has not already acquired, contracted to acquire or in respect of which it has not already received valid acceptances, as contemplated by the Offer Document.

GKN de-lists today 21.05.18