Turnaround specialist Melrose led FTSE fallers today as its share price fell over six per cent following reports of disappointing bids for one of its GKN units.
Melrose, which bought aerospace company GKN in an £8bn hostile takeover earlier this year, was reportedly forced to reconsider its options after it was low-balled by bids for one of the group’s divisions.
Bids for GKN Powder Metallurgy were expected to reach £2bn, but initial bids from private equity firms Apollo and PAI partners came in at closer to £1.6bn, Sky News reported last night.
Executives at Melrose, which specialises in leading turnarounds for ailing companies, are now considering whether to continue with the sale.
“They will sell the business, but it may not be through this particular auction,” a source told Sky News.
Melrose, which specialises in turning around ailing companies, reported a loss of £256m in the first half this year. The firm said this included £124m in costs relating to the GKN purchase.
Banks were the best performers on the FTSE 100 today after EU leaders agreed Theresa May’s Brexit deal yesterday, with shares in Royal Bank of Scotland (RBS) rising almost three per cent.