GKN board accepted defeat and asked shareholders of the company to accept the GBP8.4 billion takeover bid made by turnaround specialist Melrose Industries.
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"The board now recommends that, in the event that the offer is declared wholly unconditional by Melrose, shareholders accept the offer, as the GKN directors intend to do in respect of their own beneficial holdings," the British engineer said late Thursday in response to level of acceptances for the bid.
GKN board, however, also said that Melrose would delist the company, if the level of acceptances reaches 75%. 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.
GKN's statement comes after Melrose earlier on Thursday said its takeover bid for GKN has received valid acceptances from around 52.43% of the voting rights of GKN, and accordingly its merger offer has become unconditional as to acceptances.
"Let me assure you that GKN is entering into very good hands," Melrose Chairman Christopher Miller said.
"We are delighted and grateful to have received support from GKN shareholders for our plan to create a UK industrial powerhouse with a market capitalisation of over GBP10 billion and a tremendous future."
"Melrose has made commitments as to investment in R&D, skills and people and we are very excited about putting these into action," he added.
As at 1300 BST, Melrose had received valid acceptances of its offer in respect of 901.3 million GKN shares, representing around 52.43% of the voting rights of GKN.
Melrose said it is so far aware that none of the acceptances has been received from persons acting in concert with Melrose or in respect of shares subject to an irrevocable commitment or letter of intent.
On Tuesday, the UK government sought several commitments from Melrose as part of its hostile takeover bid for GKN, as it evaluated whether the bid gives rise to national security concerns. ■