Melrose offers £1bn pension scheme boost in GKN takeover bid
Melrose has offered to inject up to £1 billion into the pension scheme of GKN as it steps up its bid to take over the engineering giant.
The turnaround specialists said the money represented almost twice the amount of GKN's plans to reduce the deficit in the scheme.
Christopher Miller, chairman of Melrose, said: "The proposal we have made to the trustees of up to £1 billion of contributions under our ownership is 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.
"Melrose's measured approach represents certainty of strategy, value and management. We strongly urge GKN shareholders to accept our offer without delay."
GKN shareholders will decide on March 29 whether to accept Melrose's bid for the company.
Mr Miller accused GKN of putting forward "hastily-assembled and ill-considered proposals" to fend off Melrose which he claimed would "destroy" potential value and add significant risk for shareholders and in the underlying businesses.
"By accepting the Melrose offer, GKN shareholders will keep the potential value of all the GKN assets as majority owners of a much larger business and a management team with a clearly superior track record.
"Unless they accept our offer, GKN shareholders will end up with shares in an aerospace business overburdened with up to £3 billion of pension liabilities upon the planned disposals, and a minority shareholding in a Dana-managed Driveline business without a UK primary listing, which many won't be able to hold," he added.
Officials from the Unite union will press Melrose on how it will fund the pension injection and the timeframe, when they meet the company in London on Monday.
Unite's assistant general secretary Steve Turner said: "Melrose's bosses have been far from clear about the detail of their true intentions for GKN beyond vague platitudes and soundbites.
"Question marks remain around the levels of debt Melrose will pile on the company and what it means for jobs, long-term investment and product development."