GKN: Telford MP Lucy Allan pressing pensions watchdog over hostile takeover

Ms Allan has requested further information under the Freedom of Information Act about the regulator’s dealings with GKN and the investment group Melrose plc, which is looking to take over the engineering giant.

She has asked the pensions regulator about the dates and number of meetings it has had with Melrose, GKN, and the trustees of the GKN pension scheme since 2016.

Ms Allan said she was expecting a response to the questions this week.

Shareholders have until March 29 to consider an £8.1 billion takeover bid for GKN, which has a base at Hadley in Telford.

GKN chief executive Anne Stevens said Melrose does not have the experience to run a company the size of GKN.

“In scale and nature, GKN is completely different from any business Melrose has ever bought,” she said.

“Melrose lacks the knowledge and experience to manage GKN successfully and has absolutely no plan for the business.”

She said the firm’s offer for GKN did “not come close” to reflecting its true value and said shareholders should reject it.

Obligations

The pensions regulator had previously warned the deal could weaken GKN’s ability to meet its pension obligations.

Turnaround specialist Melrose originally offered to invest £150m cash into the GKN pension schemes, but has since increased its pledge to £1bn.

GKN’s largest shareholder, the investment group Colombia Threadneedle, has said it plans to reject the bid.

Ms Allan has sought assurances from the government on jobs and operations at GKN, which employs about 340 people at Hadley Park.

She said: “I’m pleased GKN is putting up a good fight, and like them, I am determined to protect the jobs and pensions of staff at its Hadley Park site in Telford.

“GKN has strong ties with Hadley Park, and it is important we do all we can to ensure this great British company remains in the area and is not broken up for the benefit of shareholders.”

Earlier this week, GKN finance director Jos Sclater criticised Melrose’s offer to the company pension fund.

“A month ago, Melrose appeared to suggest that its plan to pay £150 million into the pension scheme was sufficient,” he said.

“Now it appears to have unveiled a £1 billion plan that would achieve less than GKN’s own agreement with the trustees, at a greater cash cost which would erode shareholder value.

“I think our shareholders deserve better.”