{"id":14875,"date":"2018-03-26T15:30:55","date_gmt":"2018-03-26T14:30:55","guid":{"rendered":"http:\/\/unitelive.org\/?p=14875"},"modified":"2020-11-12T12:59:05","modified_gmt":"2020-11-12T12:59:05","slug":"gkn-melrose-reject-bid-plea","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=14875","title":{"rendered":"Reject the bid plea"},"content":{"rendered":"
<\/div>\n

As GKN investors face a vote on Thursday (March 29) on whether to accept a predatory takeover bid from \u00e2\u20ac\u0098turnaround specialist\u00e2\u20ac\u2122 Melrose, Unite has again urged shareholders to reject the bid and instead vote for the company\u00e2\u20ac\u2122s long-term future.<\/p>\n

 <\/p>\n

Late on Friday afternoon (March 23), Melrose\u00e2\u20ac\u2122s short-term intentions were further revealed when it came to light that the firm had lifted a self-imposed deadline for approval of its debt-fuelled takeover by US authorities \u00e2\u20ac\u201c in effect asking shareholders to take a \u00e2\u20ac\u0098leap in the dark\u00e2\u20ac\u2122, Unite has said.<\/p>\n

 <\/p>\n

Initially, Melrose had said its takeover bid would be dependent on approval from the Committee on Foreign Investment in the United States (CFIUS), which has the power to block takeovers if they threaten national security. Although GKN is not a US firm, it is involved in the manufacture of US defence equipment and aircraft, including the B-21 bomber aircraft.<\/p>\n

 <\/p>\n

Now that Melrose has waived the requirement that CFIUS approve the takeover before shareholders vote on the deal, investors will take a risk not knowing whether the takeover will be held up by US authorities later when the Committee makes its decision.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bMelrose is effectively asking shareholders to take a leap in the dark and back its debt-fuelled bid, not knowing if it will be held up by the US authorities on national defence grounds or whether it will retain customers,\u00e2\u20ac\u0165 said Unite assistant general secretary Steve Turner.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThere is every possibility that the US authorities will intervene in Melrose\u00e2\u20ac\u2122s bid on national security grounds,\u00e2\u20ac\u0165 he explained. \u00e2\u20ac\u015bGKN is a major supplier to the US military and a key partner on defence programmes such as the F-35 joint strike aircraft in which the UK government has a stake.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Turner also highlighted warnings from major GKN customers such as Airbus, whose chief operating officer Tom Williams said earlier this month that \u00e2\u20ac\u015bit would be practically impossible\u00e2\u20ac\u0165 for Airbus to give GKN any new work if the Melrose takeover goes through because Melrose\u00e2\u20ac\u2122s business model is based on short-termism.<\/p>\n

 <\/p>\n

Turner said the Airbus warnings, added to the uncertainty over the pending CFIUS decision, leaves shareholders in a \u00e2\u20ac\u015bsea of uncertainty and instability.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bWe urge shareholders to back stable long-term relationships and investment in world class design, engineering and manufacturing that only GKN can provide, over the uncertainty of Melrose,\u00e2\u20ac\u0165 he noted.<\/p>\n

 <\/p>\n

Push for stronger takeover laws <\/em><\/strong><\/p>\n

The call to shareholders comes as Unite has pushed for stronger takeover laws in the UK. Less than two weeks ago, consumer goods giant Unilever announced it would be moving its headquarters<\/a> to Rotterdam \u00e2\u20ac\u201c choosing the Dutch city over London \u00e2\u20ac\u201c specifically because the UK\u00e2\u20ac\u2122s weak laws left companies exposed to predatory takeovers like Melrose\u00e2\u20ac\u2122s.<\/p>\n

 <\/p>\n

Unite general secretary Len McCluskey explained in a LabourList<\/em> comment piece today<\/a> (March 26) that because shareholders\u00e2\u20ac\u2122 interests reign supreme in UK takeovers, the national interest or long-term interests of companies, their workers, customers and suppliers always takes a back seat.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThis allows the forces of short-termism, and the interests of speculators looking to turn a quick buck, to destroy jobs and run riot with our great British household name companies,\u00e2\u20ac\u0165 he said.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bBut it doesn\u00e2\u20ac\u2122t have to be this way,\u00e2\u20ac\u0165 McCluskey added. \u00e2\u20ac\u015bUK firms are as able to use protection mechanisms to preserve control as any others. Companies in Holland, France and across Europe make frequent use of so-called control enhancing mechanisms (CEMs) to lock-in long-term shareholder investment and reduce the risk of unfriendly approaches, and the evidence they work is fewer hostile takeovers and firms controlled by foreign investors.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

But, the Unite general secretary said, UK companies often don\u00e2\u20ac\u2122t use CEMs \u00e2\u20ac\u201c which can allow long-term investors to have a greater say in takeover votes \u00e2\u20ac\u201c because \u00e2\u20ac\u015bmore often than not, board members want to cash in when the opportunity arises, while vested interests driven by short-term profit put the preservation of jobs and the retention of key British businesses at risk.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Unite last week commissioned a report by Acuity Analysis which lays out a blue print for strengthening the UK\u00e2\u20ac\u2122s takeover laws.<\/a><\/p>\n

 <\/p>\n

Power to intervene<\/em><\/strong><\/p>\n

Despite the UK\u00e2\u20ac\u2122s weak laws, action can be taken now by the government in the Melrose bid \u00e2\u20ac\u201c it has the power to intervene on national security grounds. But Unite fears the government will refuse to do so despite calls from MPs from across the political spectrum to block the bid.<\/p>\n

 <\/p>\n

McCluskey highlighted \u00e2\u20ac\u015bTheresa May\u00e2\u20ac\u2122s continued inaction,\u00e2\u20ac\u0165 warning of the \u00e2\u20ac\u015bvery real danger that more companies like Unilever will flee overseas, while more UK employers fall prey to hostile bids, leaving the workforce, national and social interests to be sacrificed on the altar of short-term asset-strippers.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Shareholders have until noon on Thursday (March 29) to decide whether to accept Melrose\u00e2\u20ac\u2122s bid or the GKN management plan, which would see the firm\u00e2\u20ac\u2122s Driveline business merged with Dana<\/a>, a US-based vehicle component manufacturer.<\/p>\n

 <\/p>\n

About 10 per cent of shareholders have already committed to the Melrose plan, while about 9 per cent have pledged to back GKN management. For the takeover to be go through, just over 50 per cent of shareholders must vote in favour of Melrose.<\/p>\n

 <\/p>\n

Stay tuned on UNITElive on Thursday (March 29) for more after the shareholder vote<\/p>\n","protected":false},"excerpt":{"rendered":"

As GKN investors face a vote on Thursday (March 29) on whether to accept a predatory takeover bid from \u00e2\u20ac\u0098turnaround specialist\u00e2\u20ac\u2122 Melrose, Unite has again urged shareholders to reject the bid and instead vote for the company\u00e2\u20ac\u2122s long-term future.   Late on Friday afternoon (March 23), Melrose\u00e2\u20ac\u2122s short-term intentions were further revealed when it came […]<\/p>\n","protected":false},"author":2,"featured_media":14877,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[624,865,690],"wps_subtitle":"GKN shareholders again urged to reject hostile bid","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14875"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14875"}],"version-history":[{"count":2,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14875\/revisions"}],"predecessor-version":[{"id":26310,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/14875\/revisions\/26310"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/14877"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}