Melrose has said it will no longer make its bid for GKN dependent on US national security clearance
Melrose has waived the condition it set for itself in its proposed takeover of engineering giant GKN, that meant it would need national security clearance from US authorities in order to proceed with the deal.
Turnaround firm Melrose, which is pursuing an £8.1bn hostile bid for GKN, had made its offer dependent on approval from the Committee on Foreign Investment in the United States (Cfius). This US authority has the power to prevent takeovers on the grounds of national security.
But today Melrose said it was waiving this requirement, as it has still not had a final decision from Cfius or the US Diplomatic Security Service (DSS).
Read more: An influential advisory group has just told Melrose shareholders to oppose its hostile bid for GKN
“Melrose continues to have constructive discussions with Cfius and the DSS in the United States in relation to obtaining clearance within the expected timetable for the Final Offer for GKN plc,” Melose said in a statement.
“These include detailed discussions in respect of potential interim mitigation measures, which would leave in place any existing mitigation arrangements pending receipt of Cfius and DSS approvals.”
But Melrose added that if it had not received approvals by 17 April, it would waive the requirements so that its offer for GKN could become unconditional by the 19 April.
Shareholders are due to vote on the Melrose bid by 29 March.
Read more: Major GKN investor Jupiter joins Airbus in opposing Melrose’s hostile bid
GKN had indicated that, if Melrose wanted to apply for an extension of the shareholder acceptance deadline to wait for Cfius approvals so shareholders could make a “fully informed decision” about whether to accept the bid, it would support such an extension.
But Melrose appears to be banking on shareholders being willing to accept its offer, despite the fact that they may not know which way Cfius will go.
Several lawmakers in the US and the UK have raised national security concerns over the Melrose bid for GKN, as the latter makes components for a number of military aircraft.
Read more: Ministers are assessing Melrose’s £7bn bid for GKN over national security concerns