Analysts in the sector have fuelled talk of a split, and up until a profit warning last week GKN's shares had benefited from the reports.
Shares closed at their lowest level this year on Friday following the announcement of two "significant external claims", resulting in a charge of around £40m and weaker than expected performance in GKN's aerospace division.
Following the announcement, Wasi Rizvi, analyst at RBC Europe, said: "Our conversations with investors suggested that a scenario in which GKN becomes an aerospace pure-play was the favoured potential outcome...however there will now be more question marks around the attractions of GKN aerospace."
The Sunday Times reported GKN was in the early stages of considering the plan but that a break-up could occur within months.
The promotion of two senior executives recently pushed talks of a split back into the spotlight.
Kevin Cummings, the head of GKN's aerospace division, was named the successor to chief executive Nigel Stein, who is stepping down at the end of the year. Strategy chief Jos Sclater was also promoted to finance director to replace Adam Walker.
However, one big barrier that stands in the way of any split is GKN's historic pensions deficit.
The Sunday Times added that GKN was looking to bolster its aerospace unit with more acquisitions and was also likely to add its powder metallurgy business, which makes parts from powdered metal, to the division.
Meanwhile, the engineer's driveline unit, which makes parts for vehicle drivetrains and accounts for about half of the group's revenues, is eyeing a slice of the electric vehicle market.
The firm's stock closed at 298.9p on Friday, valuing GKN at £5.1bn. That was down from a high of 376.5p in March this year.
GKN declined to comment.