Having secured GKN's takeover (like Brexit, just) the hedge funds are after Melrose. They know that the company will be weighed down by huge debts, which will be difficult to service. So they will soon be starting their 'shorting' strategy, slowly at first, but gaining momentum once Melrose's consolidated Balance Sheet (including GKN) is published. Any GKN investor selling to Melrose should take the cash they were offered and once banked they should sell their Melrose shares as quickly as possible.
The hedge funds plan to make millions; the only losers will be Melrose's shareholders.
As announced in Parliament today by the Secretary of State for Business, Energy and Industrial Strategy, Melrose confirms that it has entered into deeds of undertaking in respect of the GKN businesses, including in relation to national security.
As a British company, Melrose works in the national interest and remains wholly committed to protecting the UK's national security.
A copy of each of the respective Deeds of Covenant and Undertaking will be published on Melrose's corporate website: www.melroseplc.net
Christopher Miller, Chairman of Melrose, said today:
"We are pleased to sign these legally binding commitments. We have been in discussions for many weeks with Government as to how best to cement our long standing and clear undertakings and are grateful for their guidance. We look forward to continuing to work with the Government as we return GKN to be a manufacturing and engineering powerhouse."
If you have accepted the Melrose offer then you have already sold your GKN shares and effectively no longer own them. You have to wait for the completion of the transaction, get your cash and New Melrose shares then you can sell those.
Melrose is pleased to announce that its Offer for GKN is now unconditional in all respects following the satisfaction of the Admission Condition.
Earlier today 2,468,470,543 New Melrose Shares were admitted to listing on the premium segment of the Official List of the UKLA and were admitted to trading on the London Stock Exchange's main market for listed securities in respect of valid acceptances for 1,460,633,457 GKN shares received as at 12.00 p.m. on 18 April 2018, representing approximately 84.97 per cent. of the voting rights of GKN. The cash element of the consideration will be settled or despatched by no later than 3 May 2018 in respect of valid acceptances received by 12:00 p.m. on 18 April 2018.
GKN Shareholders who have not accepted the Offer are urged to do so as soon as possible in accordance with the instructions set out in the Final Offer Document.
Update on GKN
Melrose's early stage review of GKN has confirmed its Board's conviction of the extent of the opportunity to improve GKN's business for the benefit of its shareholders and wider stakeholders. Melrose looks forward to transforming GKN through operational improvements, investment, new leadership and a fundamental change in culture, so that GKN's businesses can reach their full potential.
Melrose intends, on Tuesday 24 April 2018, to update the markets with a short statement covering GKN trading for the 13 week period from 1 January 2018 to 31 March 2018, a period prior to Melrose ownership. The short GKN trading update next week will be followed by a comprehensive review of GKN performance to be given at the Melrose half year results announcement in early September 2018.
Changes to the Board of GKN
As the Offer has been declared wholly unconditional, Melrose announces that all the members of the Board of GKN have resigned from the Board of GKN plc as of today's date. Melrose thanks each of the GKN Board members for their commitment to GKN. In accordance with the articles of association of GKN plc, Christopher Miller, David Roper, Simon Peckham, Geoffrey Martin, Jonathon Crawford and Garry Barnes have been appointed to the GKN Board for an interim period until such time as the cancellation of the trading of GKN Shares on the London Stock Exchange's main market for listed securities and the cancellation of the listing of GKN Shares on the UKLA's Official List takes effect, expected to be on or around 21 May 2018.
Christopher Miller, Chairman of Melrose said today:
"Today sees the formation of a new manufacturing powerhouse, headquartered in the UK and with diverse operations around the world. Each of these operations has enormous potential and under Melrose ownership we know we can help them fulfil that potential. Every time we have acquired a company, we have found talented and dedicated people at all levels of the business who have been enthusiastic about change. This will be the case at GKN: The knowledge and vision of the GKN teams will find full focus under Melrose and together we will transform the prospects of the business as Melrose has done with all our previous acquisitions.
We have begun our in-depth review and this has confirmed our expectations about the size and scale of the opportunity to create lasting value for shareholders and all stakeholders as we drive the businesses to their full potential.
Investment in R&D, skills, new products and new technology will be at the heart of our programme. As we have said throughout, Melrose manages and operates its businesses as if we were going to own them forever, and we will continue to do so. We will be speaking to customers and suppliers about how we can improve our service to them and drive long term programmes to their satisfaction.
We are pleased to make binding commitments to the UK and other Governments around the world about our commitment to GKN and
Just wonder when Greg Clark and Gavin W are going to pop their heads in and
declaim - or are they hoping their earlier pronouncements are now forgotten and
they will be saved the embarrassment of having to sound the 'all clear.'
Update on Offer acceptances and anticipated cancellation of listing and trading of GKN Shares
As at 3.00 p.m. on 16 April 2018 Melrose had received acceptances of its Offer in respect of 1,406,130,769 GKN Shares, representing approximately 81.80 per cent. of the voting rights of GKN. Consequently, once the Offer has been declared wholly unconditional by 19 April 2018, Melrose intends to procure that GKN applies to the London Stock Exchange for the cancellation of the trading of GKN Shares on its main market for listed securities and the UKLA will be requested to cancel the listing of GKN Shares on the Official List.
The cancellation of listing and admission to trading of GKN Shares on the Official List and Main Market respectively is expected to take effect on or around 21 May 2018, being 20 Business Days from the date on which the Offer is expected to become wholly unconditional. Such cancellation of listing and admission to trading will significantly reduce the liquidity and marketability of any GKN Shares not assented to the Offer.
"Of course, but to say that folk sold because of a lack of faith in GKN is making an assumption that has no basis."
Lupo, that is precisely why I was glad to get out of GKN at 4.25 after sitting on a loss for over 2 years while the company meandered on with no apparent direction. I hate selling at a loss so was just hanging on until I was back in the black. The boost from the bid was a bonus for me.
alanwri - "Lupo, those speculators to which you refer at the end of your missive had to get their share purchases from somewhere."
Of course, but to say that folk sold because of a lack of faith in GKN is making an assumption that has no basis. I sold part of my holding because I felt that I'd got a good price, and that I didn't want to become a MRO shareholder, and that I thought that it wouldn't go any higher. If GKN had remained independent, I'd have bought back at a lower price. No doubt I was not alone in my reasoning.
On the contrary Lupo, my post was not unreasoned. However, clearly tongue in cheek so Ill give you the ridiculous. Just about as ridiculous as Brexit I might add but that is of course only my opinion, and most likely irrelevant to Melrose and GKN.
Lupo, those speculators to which you refer at the end of your missive had to get their share purchases from somewhere. Presumably from people prepared to sell because they had no faith in the management or future of GKN!
Leaving aside that ridiculous, unreasoned, post, here's some comment on the subject.
"Business Secretary Greg Clark has revealed that the details of the takeover plan are being looked at by government including the MoD as it decides if it will intervene.
The takeover plan, which was approved by the company's shareholders last week, has sparked concerns in Telford, where the firm has a factory that employs more than 340 people.
The government does have powers to block the deal under the 2002 Enterprise Act. Takeovers can be refused if they are deemed to affect media plurality, financial stability or - as in GKN's case - national security.
Mr Clark said: As a competitive economy, Britain has always had vigorous contests for the management of public companies. Competition for how a business should best be run drives efficiency and competitiveness, which is important for the economy and stakeholders.
"During the bid, Melrose made commitments which they are bound to honour including investment in research and development and maintaining itself as a UK business. (Lupo - you could drive a bus through those "commitments.)
"Now that shareholders have made their decision the Government has a statutory responsibility to consider whether the merger in its proposed final form gives rise to public interest concerns in the areas of media plurality, financial stability and national security.
"This assessment will be made by the appropriate authorities and the conclusion set out in due course."
The Defence Secretary Gavin Williamson is said to be concerned about the deal.
Sir Gerald Howarth, formerly in charge of international security strategy, has said that the government is right to be sceptical about the takeover. He said: "Gavin Williamson is absolutely right to oppose the Melrose acquisition of GKN Aerospace unless cast-iron assurances are given that Melrose will maintain the business and invest in new aerospace technology and that they will not seek to dispose of the business without prior approval from the Ministry of Defence."
The GMB union has added its voice to the chorus of those opposed to the takeover with Ross Murdoch, the organisation's national officer calling directly on Mr Clark to intervene. He said: "Allowing the short term gain of speculators to influence the future of one of Britain's oldest engineering firms sends out a harsh message to GKN employees: profits come before their job security.
"Greg Clark must stop this deal before it damages the UK economy further."
A decision on whether to block the takeover is expected to be taken in the next few weeks.
Lupo - That it was "short-term" speculators who determined the result cannot be denied. Nor can it be denied that it is MRO's stated aim to buy and sell companies; so they've made a rod for their own backs there. It just remains for the MoD to determine whether or not the UK's security could be under threat by the hostile bid and what might follow. Personally, I assume that the MoD will make the right decision whichever way it goes. If required, they could go for further assurances regarding the future of the Aerospace division, but any such assurances had better be watertight, unlike the earlier assurances.
scathing attacks in the Times on the 'hapless' and 'dozy Business Secretary Greg Clark.
'wittering on about spurous 'national security' grounds he should save himself the trouble.
Its in the nations interests that Melrose won.' #Metoo.
Talk in the papers about the govt stopping the takeover on security grounds. Not much chance, but if it was up to me I would say I will float aero on the FTSE when it is working well, then leave it up to the company to fight off any takeover bid that would come.
I think Melrose need to build the U.K. operations, possibly with synergistic acquisitions, to build confidence in the U.K. before their next foray into, hopefully not hostile, takeovers.
Personally, I honestly believe that if GKN had won bids for Aero would have happened in the next few months from foreign buyers.
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