GKN grants Melrose more time on bid as US defence review looms

GKN grants Melrose more time on bid as US defence review looms

GKN has said it is willing to allow Melrose more time to complete its hostile takeover bid in order to avoid shareholders rushing to approve it without knowing the implications of a US government review.

The FTSE 100 engineer believes that it will take Melrose longer than the standard offer timetable to secure approval from the US government panel that reviews takeovers with possible national security concerns – the Committee on Foreign Investment in the United States (CFIUS).

GKN has taken the seemingly paradoxical step of allowing its suitor more time to win over its shareholders because it wants them to know the outcome of the review before they approve or reject Melrose’s advances.

FTSE 250-listed turnaround specialist Melrose made its official offer for GKN on February 1 and stipulated that it needed to meet “defence and ministerial conditions” within 21 days of a 60-day timeline and would require an extension if it did not.