Unite urges government to block 'predatory' Melrose bid for GKN

12 January 2018

(ShareCast News) - Unite has urged the government to block what it called a "predatory" and "destructive" takeover bid for engineer GKN by turnaround specialist Melrose Industries.

The Unite union said on Friday that ministers need to toughen up UK takeover rules so that national and social interests are prime factors in any decision rather than the depth of a hostile bidder's pockets. This came after GKN said earlier that it had rejected a 405p per share offer from Melrose, saying it was "entirely opportunistic" and "fundamentally" undervalues the company.

The union urged shareholders to hold firm, warning that the bid was not in the long-term interest of GKN and could result in the company's assets being stripped. Unite, which is the main union representing workers across GKN's automotive, aerospace and R&D divisions, warned government ministers that any hope of a coherent industrial strategy would lie in tatters if the Melrose bid was allowed to succeed.

Assistant general secretary for manufacturing, Tony Burke, said: "The only interests this predatory takeover bid are in, are those of the speculators looking to turn a quick buck. Government ministers need to step in and block this bid and toughen up UK takeover laws.

"Takeovers need to be decided on more than just how much money a hostile bidder can throw at shareholders. The impact on communities and the national interest need to be main deciding factors in takeover bids as is the case in countries such as Holland.

"If Melrose's bid is successful it will blow a hole in the government's hope of developing a coherent industrial strategy and signal that government ministers are happy to see yet another British company fall prey to vulture capital."

Unite said it is in close dialogue with GKN executives and its shop stewards will be meeting next week with their European counterparts to agree a coordinated response to stop a takeover.