GKN’s electric car division success boosts firm against hostile takeover by Melrose

GKN engineers
Credit: GKN

GKN has sought to bolster its defences against a hostile takeover by Melrose with new figures suggesting its business is poised to accelerate as part of the electric car revolution.

The FTSE 100 engineer yesterday revealed raised forecasts for its electric driveline division, which makes parts for BMW and Volvo as well as Chinese brands. The business is now expected to generate sales of £275m in 2020, up from a prior forecast of £200m and last year’s figure of £33m.

Phil Swash, the chief executive of GKN Driveline, said the forecast underscored that the company is “well positioned to capitalise on the strong market growth in hybrid and electric vehicles”, with a £2bn order book.

Melrose, which is courting shareholders with a £7bn hostile bid, said it welcomed the news as “part of the justification of the premium that we are offering to GKN shareholders as we seek to create a £11bn value powerhouse by merging our two businesses”.

The 29pc premium Melrose tabled has been dismissed as “fake” by GKN. One top 10 shareholder in the company told The Daily Telegraph it believed it was in a strong position to negotiate. A fund manager source said: “If Melrose increases the number of shares in the deal, the likelihood of a successful acquisition will improve. On its own, GKN has some very high quality assets that can be improved, and this puts them in a strong position to negotiate.”

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