UK engineer GKN turns down £7.0bn bid by Melrose

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British engineering group GKN on Friday turned down a takeover bid from turnaround specialist Melrose worth £7.0 billion.

GKN, which makes wing tips for planes made by European giant Airbus, rejected an "unsolicited" takeover worth the equivalent of $9.5 billion or 7.9 billion euros.

The board of GKN "concluded that the proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects", according to a statement.

GKN's share price soared on the news, up almost 30 percent at 431.70 pence in afternoon deals, easily topping the FTSE 100 risers' board.

Melrose's offer, which stood at 405 pence per GKN share, comes after the engineering group issued a profits warning in October over the performance of its US aerospace business.

Melrose said in a separate statement that "there would be significant operational and commercial benefits arising from Melrose's ownership of GKN's businesses, reversing a history of existing GKN management not delivering on margin targets".


© 2018 AFP

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