GKN is expected to offer shareholders a cash payout during the upcoming week as it seeks to fight off a hostile takeover attempt.
The engineering company is thought to have drawn up a document of proposals to placate shareholders in the face of a £7.4bn bid from Melrose.
The plans were first reported by The Sunday Times. The newspaper also reported that the group had pledged to put its metallurgy business up for sale and cut costs in order to fund a plug for the £1.1bn deficit in the group's pension scheme and a payday for investors.
GKN declined to comment.
The company, which was thrown into chaos last year by the departure of its new chief executive before he had even started, is attempting to persuade investors to reject the bid, which it has called "derisory".
This comes after a US congressman said over the weekend that the bid by Melrose could pose a security risk.
Neal Dunn wrote to the Committee on Foreign Investment in the US, saying that Melrose's buyout attempt could threaten ongoing secret programmes in the US air force for which GKN is a supplier.
British politicians have also raised alarm bells, with the chair of the influential cross-party business committee citing "serious concerns" over the deal.