GKN - Offer rejected, Automotive and Aerospace to separate

GKN - Offer rejected, Automotive and Aerospace to separate

GKN, the FTSE 100 aerospace and automotive company which issued a shock profit warning in November, has rejected an unsolicited £7bn approach from rival Melrose and unveiled plans to split in two.

GKN, whose roots date back to the 18th century, makes parts for the Boeing 737 jet, Black Hawk helicopter and components for Volkswagen and Ford cars.

GKN, which used to be known as Guest, Keen and Nettlefolds and traces its history back to 1759, has struggled in recent years and its profit warning came after a downturn in its USA aerospace business. Melrose believes that shareholder value would be maximised by it significantly improving the businesses prior to any separation.

The share-and-cash offer, tabled on January 8th, valued GKN at 405 pence per share at that time, a 24 per cent premium to the closing price the day before. GKN shares were gaining around 26 percent in the morning trading in London.

The bid was rejected, but GKN promptly admitted that it would now start the process of a demerger.

In November, the company announced that its CEO designate Kevin Cummings was leaving the company with immediate effect following a profit warning brought about by difficulties on U.S. aerospace operations.

"Her operational and strategic skills are ideally suited to GKN and the Board is very impressed with the contribution she has made so far in setting out plans for a significant improvement in the Group's performance", he added.

20 year-old man wins $450 million Mega Millions Jackpot
The jackpot is the fourth-largest in Mega Millions history, and Missler is the sole victor . For 20-year-old Shane Missler, it was over coffee the day after he hit the lottery jackpot.

Merkley, Wyden: Spare Oregon coast from drilling, too
A source with knowledge of the matter said Cooper was also trying to arrange an immediate meeting with Zinke. In the announcement, Zinke called Scott, a fellow Republican, a "straightforward leader that can be trusted".

White House doctor: President Trump 'is in excellent health'
Physical exams for presidents have been a norm since Richard Nixon , according to ABC News, but they aren't required. Trump is getting the customary presidential health check amid questions about his fitness for office.

GKN said: "The proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects".

Hyett said: "A takeover offer, subsequent rejection, new CEO, transformation strategy, trading update and planned separation of the business all in one go - it's hard to describe GKN as a Mondeo now!" The offer would result in GKN shareholders owning approximately 57% of the enlarged group.

'The separation of the automotive and aerospace units has been on the cards for years, with little obvious cross over between the two businesses, ' he said.

"GKN is a world leader with the potential to perform even better", she said.

It said both businesses would benefit from being separate companies with distinct investment profiles and capital allocation policies.

Market sources suggested companies such as Spirit AeroSystems or Triumph Group could be suitors for GKN's aerospace business.

Prospective bidder Melrose is a turnaround specialist, picking up floundering firms on the cheap with the intention of improving them and selling them off at a higher price. It carried net debt of around £700 million as of June 30th, 2017.

Related News:



Most liked

Rewind: NFL playoffs' most memorable divisional-round games
The rest of his team will just need to be on its A game. - New Orleans are 1-6 all time on the road in the playoffs. New England is allowing 5.73 yards per play this season, worse than every team except the Tampa Bay Buccaneers .

Financial sector is priority for United Kingdom in Brexit negotiations
Other sectors reported include science and technology (92,000 fewer jobs), construction (43,000 fewer jobs) and the creative sector (27,000 fewer jobs).

Indian Army jawans injured during practice drill
Slithering is an exercise where troops are dropped from a helicopter in an area of operation using a rope attached to the chopper. The sources said a separate inquiry on technical aspects of the incident has also been ordered.

Steve Kerr laments coverage of LaVar Ball, the 'Kardashian of the NBA'
Randle spent most of the season using his superior athleticism to get the better of backup centers and power forwards as a scorer. As a subsidiary of the Walt Disney Company, ESPN is responsible for generating revenue.

Baylor coach Matt Rhule interviews for Colts job, report says
After an exodus of talent and recruits due to the sexual assault scandal, Baylor went 1-11 last season - Rhule's first on the job. While Rhule doesn't have much in terms of head coaching experience, he is thought to be an up and coming offensive mind.

Mobile gantry rolled back to reveal Delta 4 rocket at Vandenberg
What we do know is that the NROL-47 mission patch depicts a white knight brandishing a sword at a terrifying brown dragon. The NRO mission patch sports Latin words that translated into "Evil will never prevail", a ULA representative said.

A Photograph Helps Vikas Gupta Win His Task!
An equal amount of money will be deducted from the winner's account if it is somebody other than Vikas Gupta . When Shilpa and Vikas talk against Hina, Puneesh stops them and supports Hina (which is really sweet of him).

Letterman and Obama Refuse to Name-Check Trump in Bland Sit-Down
Obama teased Letterman now about his "biblical" beard and idiosyncrasies. "Oh, he would have been here", Lewis replies. My Next Guest Needs No Introduction With David Letterman is streaming now on Netflix.

US Supreme Court to Hear Case on Ecommerce Taxation
Steve DelBianco, president of e-commerce trade association NetChoice, expressed disappointment about the court taking up the case. Rafael Anchia, a Democrat and chairman of the Mexican American Legislative Caucus, which is a plaintiff in the case.

Oprah Winfrey urged to run for president
King described Graham as being 'nothing but supportive, ' adding, 'he would never throw it out there like that'. If you wonder why anyone is taking the Oprah-for-president idea seriously, go back and listen to that speech .

Canada schoolgirl attacked over hijab
The blue hijab she was wearing was cut about 12 inches, the girl's mother said. "I'm just happy she's safe". The kids told the principal what happened when they arrived at school. "You should not act like this".

5 women reportedly accuse James Franco of sexual misconduct
Two women said Franco became angry shooting a strip club scene when no actresses, who were masked, would go topless. Two of the women interviewed by the Times were expanding on allegations they had previously made on Twitter .

Iranian FM in Russian Federation for talks on nuclear deal, Syria
Putin said the drones looked primitive but contained high-tech elements allowing precision satellite guidance and release of munitions.

LSU RB Derrius Guice, Likely Early-Round Pick, Declares for NFL Draft
Guice set the single-season school record for rushing yards in a 285-yard effort against Texas A&M in the 2016 season finale. Guice, just 20 years old, played three years for the LSU Tigers of the Southeastern Athletic Conference.

James Harrison clears up anthem confusion after Patriots win
Are the New England Patriots laying too many points to their AFC East rivals, the New York Jets , Sunday at 1:00 p.m. The impact, or more specifically Bademosi's reaction, was even enough to make the corner's sideline jacket fly off.