In early March, it was announced that Dana would acquire part of GKN, following reports of a hostile takeover bid for GKN from Melrose Industries. On March 29, it was reported that the Dana/GKN merger has now collapsed and GKN’s board has accepted a new offer from Melrose Industries instead.
Melrose has received valid acceptances with respect to a total of 901,318,533 GKN shares, representing approximately 52.43 percent of the voting rights of GKN and the offer has been declared unconditional as to acceptances.
The board of GKN, which has been advised by Gleacher Shacklock, J.P. Morgan Cazenove and UBS Limited as to the financial terms of the offer, has made it clear that it believes the offer fundamentally undervalues GKN. In providing financial advice to the board, the advisers have taken into account the board’s commercial assessments. However, the board recognizes that, in the event that the offer is declared wholly unconditional, Melrose would acquire control of GKN.
If the level of acceptances reaches 75 percent, Melrose has stated that it intends to take steps to delist the company. This could leave shareholders with a minority interest in an unlisted company, with the liquidity and marketability of GKN shares significantly reduced as a result.
The GKN board says it now intends to work with Melrose to ensure the success of the enlarged company, in the interests of all stakeholders, including employees, customers and shareholders.
Dana Comments On Decision By GKN Shareholders
Dana Inc. issued a statement saying acknowledging the decision by a majority of the shareholders of GKN plc to accept the proposal by Melrose Industries plc to acquire GKN.
“As a consequence, it appears unlikely that our proposed combination with GKN Driveline will proceed. We are, of course, disappointed by today’s outcome and continue to believe Dana would be the best owner and operator of GKN Driveline,” said James Kamsickas, Dana president and CEO. “This has always been an opportunity, not a required or critical asset. Dana is a strong, thriving company, and we will continue our focus on the execution of our enterprise strategy, delivering for customers and remaining responsible stewards of our shareholders’ capital.”