BUZZ-GKN: rejects Melrose buyout proposal, to split businesses

** British engineering group's shares up 20 pct after co rejects Melrose Industries (Frankfurt: 27MA.F - news) (+4 pct) acquisition proposal

** Confirms it got cash and stock proposal from Melrose (LSE: 136541.L - news) for 405 pence per share on Jan 8; offer represents a premium of 24 percent to close on Jan 5.

** GKN (Frankfurt: 694194 - news) says "concluded that the proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects"

** Also names Anne Stevens, currently Interim Chief Executive, as Chief Executive with immediate effect.

** Says intends to separate businesses and that new strategy has been developed

** New (KOSDAQ: 160550.KQ - news) project expected to deliver significant increase in annual cash flow with the full run rate achieved during 2020

** GKN says Q4 trading in line with expectations, continues to expect 2017 profit before tax to be slightly ahead of 2016

** GKN shares touch their highest in nearly 4 years