GKN share price skyrockets as group rejects 'opportunistic' Melrose bid

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Melrose must now make a firm offer for GKN or withdraw its bid by 9 February.

"The board of GKN has considered the proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS Ltd, and has unanimously rejected it, having concluded that the proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects", GKN said.

GKN said that it was accelerating plans to demerge its £4.2 billion annual revenue automotive business from its £3.4 billion aerospace operations after the unsolicited £7 billion takeover proposal from Melrose, a specialist in buying troubled engineering firms, shaking them up and selling them on again.

Melrose told the Stock Exchange on Friday there would be significant operational and commercial benefits arising from its ownership of GKN's businesses, "reversing a history of existing GKN management not delivering on margin targets".

The timeframe has not be specified but will "maximise the economic benefits and minimise the costs", says GKN.

Under the Project Boost programmeme, GKN plans to improve its cash and profit by sharpening its productivity, capital allocation and procurement activity.

Shares in British engineering firm, GKN, have risen after a takeover bid was rejected by the company.

In the mid-caps, housebuilder Bovis (LON:BVS) shares gained 1.0% as the company reaffirmed its profit expectations for 2017 and that it was beginning the year with an "excellent" forward sales position.

In rejecting Melrose's approach, GKN said interim CEO Anne Stevens, in the job since January 1, will keep the position permanently after taking over an "ongoing and wide-ranging" review of all businesses. She has previously served as chief executive of speciality metals producer Carpenter Technology and as a senior executive at automotive manufacturer Ford.

Commenting about the appointment of Ms Stevens, chairman Mike Turner said: "The board believes that Anne Stevens has the track record to transform GKN".

Stevens declares herself "confident that we can deliver more for our shareholders while improving what we do for our customers and supporting our employees".

The predator added: "GKN announced today its intention to separate the businesses".

October 13: GKN announces charges of 55 million pounds, including 15 million from the North American unit that Cummings once ran, after a review.

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