As the clock keeps ticking towards the acceptance deadline, GKN has now termed Melrose's unsolicited bid "low price and high risk". It said the sum Melrose was offering "is a discount compared to average multiples of comparable transactions", and that the firm's management team "lacks relevant experience".
Melrose's cash-and-share offer represented a 22 per cent premium to GKN's share price before the process kicked off. GKN claimed this is low and also misleading.
"Melrose's market capitalisation is significantly smaller than GKN's, the offer is 80 per cent in shares and Melrose brings no industrial synergies. As a result, GKN shareholders are funding most of the premium themselves, resulting in an actual premium of 10 per cent," wrote GKN's chairman Mike Turner.
Melrose has maintained that by merging GKN with its existing business, it will be able to create a stronger company. GKN counteracted this yesterday by saying it would generate a further £2.5bn of cash for shareholders.
Unless Melrose applies for an extension, the deadline for shareholder acceptance will fall at the start of April.
The turnaround firm was not happy to see GKN have the last word, and released a statement saying it needed to "correct some of the factual inaccuracies and misleading statements" which GKN had circulated.
"The maths behind Melrose's offer is simple," the firm stated. It noted that before its approach, GKN's market capitalisation was £5.6bn. If shareholders accept the offer, they will get 57 per cent of GKN plus the value which the firm expects to create, and 57 per cent of the existing Melrose group, which is worth £4.3bn plus the value it expects to create in those businesses.
Added to that, the offer also includes £1.4bn in cash – which Melrose said takes the value which will be received by shareholders to over £7bn.
"We will not cut corners in making the necessary investment that we believe GKN's businesses need. Nor will we indulge in a hasty fire-sale of the businesses the GKN board has identified as non-core," said Melrose's chairman Christopher Miller.