Melrose has increased its hostile bid for GKN and told shareholders in the UK engineering firm that it will be its “final offer”.
The turnaround specialist offered to pay 467p a share for GKN, which would value the business at £8.1bn and give GKN shareholders 60% of the combined group.
GKN, one of Britain’s oldest engineering businesses, has been fighting off Melrose’s advances since mid-January, when it rejected a £7.4bn bid.
Melrose responded by taking its offer directly to GKN investors, ramping up the pressure on GKN’s newly appointed chief executive, Anne Stevens.
On Friday, GKN struck a £4.4bn deal to merge its automotive business with the US firm Dana in an attempt to fend off Melrose.
Christopher Miller, chairman of Melrose, described the tie-up with Dana as a “bad deal” in a letter to GKN shareholders and accused the GKN board of attempting a “hasty fire sale”.
He added: “Melrose believes that this hasty and ill-thought-through transaction is prejudicial to GKN’s shareholders.”
He said Melrose had gone directly to shareholders with its latest offer because the GKN board had rebuffed all recent attempts to engage in “constructive discussions”.
GKN’s chairman, Mike Turner, wrote to investors on Monday to point out that Melrose “lacks experience in several critical areas and that its priorities are inappropriate for running a global technology-based business like GKN”.
Melrose, which specialises in buying struggling businesses, said its latest offer would not be increased under any circumstances.
Under the new offer, GKN investors would receive 81p in cash for every GKN share they hold, plus 1.69 new Melrose shares.
Melrose has kept the cash part of the deal the same but raised the equity part from 1.49 new Melrose shares.
GKN shares rose nearly 2% to 442p in early trading on Monday.