UK Markets closed

Melrose offers GKN pension trustees £1bn as deal deadline approaches

Jack Torrance
Melrose has offered to put £1bn into GKN's pension schemes - PA

Melrose has offered to put £1bn into its takeover target GKN’s pension pot as it bids to win over shareholders with its £8.1bn hostile offer.

The trustees of GKN’s pension schemes previously warned Melrose had failed to address their concerns about its offer.

But this morning the turnaround firm said they had been in “constructive discussions” leading to its offer of a £1bn injection over the course of its ownership of the business, higher than the £150m it previously offered and almost twice GKN’s proposed £528m deficit reduction package.  

Melrose chairman Christopher Miller said the offer was “a clear example of what Melrose does which is good for pensioners and shareholders alike and shows we are a good custodian for all stakeholders”  .

The boards of both businesses have been battling to win over shareholder votes ahead of the deal’s March 29 voting deadline.

This morning GKN confirmed Dana, the US firm to which it plans to sell its automotive business, has decided to launch a secondary listing on the London Stock Exchange. The move is aimed at allaying fears that some investors will be forced to exit the business following the proposed cash and paper deal because they can only invest in UK shares.

GKN chief executive Anne Stevens said: "The listing on the London Stock Exchange will make it possible for more of our shareholders to participate in the expected value creation opportunity from the combined Dana and GKN Driveline business."