GKN Share Discussion Threads

[minerve] 13/1/2018 11:58

Cisk & others

"struggling" is a relative term. Personally, I don't see GKN as a company that is "struggling".

What is at issue here is one of valuation.

As an investor, I am not a short-termist, so I am not hell-bent on accelerating valuations as quick as possible to sell out and then have to go through the exercise of finding YET ANOTHER investment to make. I am more than happy to receive a well covered dividend and allow companies to grow organically rather than through debt fueled and short-termist M&A activity which eventually - most of the time - ends in tears for certain stakeholders initially and then shareholders eventually.

Also, as an investor, I accept and appreciate that there are indeed other stakeholders in the business including employees. I appreciate that their working conditions and rights should be protected and I am not selfish to not accept the presence of Unite. Shame on MEANWHILE for slagging off unite! I am sure if he was an employee he would have a different view as to their presence!

Being an investor, believe it or not, IS NOT JUST ABOUT YOU!

Those who understand GKN are already at GKN! No question about it! I say that from being a qualified engineer who was also a director at an engineering company listed on the market.

There are many advantages in keeping GKN as GKN. Many of these values are intangible. Idiots who just see companies as a PE multiple will never learn.

I don't buy this BS about Melrose, they may not be on the sharp-end of PE, I accept that, but they are 'sharp boys' nevertheless - they run a valuation, rather than a company.

Here is to hoping the bid fails.

[cisk] 13/1/2018 08:31

Minerve, they aren’t asset strippers. They buy struggling businesses and turn them around. Difference between them and GKN management? The team built MRO up from nothing, risked their own cash in the process and have an outstanding track record.

I don’t see many boards of listed companies having done that.

And I would argue that they understand engineering businesses far better than the boards of most engineers.

[leadersoffice] 12/1/2018 23:28

Buy Legal & General

[grahamburn] 12/1/2018 18:55

A track record as illustrated by MEANWHILE - and he's only mentioned a few of their successes. You just need to look at the returns which long term shareholders in Melrose have received.

So far, Melrose has only failed to make a dramatic turnround in the fortunes of one of the many businesses which it has acquired which speaks volumes about both its ability to spot opportunities and then to capitalise on them.

The most recent acquisition of Nortek (at the back end of 2016) is a good example of Melrose's modus operandi. Nortek was a US business struggling to make its mark with disparate moving parts, but within a relatively short timescale is already moving towards a corporate success story.

Melrose are most certainly the antithesis of asset strippers.

It's worth noting that in Melrose's own RNS today stressed how they believe they can deliver superior returns in this instance, even given the plans outlined by GKN's new CEO.

However, GKN shareholders should not bank on Melrose paying over the odds for the business: they rarely have in previous purchases..

Disclosure: Hold shares in both companies, so a "merger" (on the right terms) should be a win-win situation.

[minerve] 12/1/2018 18:34

Some circles regard them as asset strippers.

What does the executive team of Melrose have that GKN doesn't?

[harvester] 12/1/2018 12:05

Worth waiting to hold &sse if Melrose come back with a better offer.GKN seemed undervalued before. Agree with bod that approach is opportunistic.GKN now in play and bod will have to work harder to keep control.

[nw99] 12/1/2018 11:41

Sold taken profits

[cyfalafwr] 12/1/2018 11:39

Minerve , good call.

Put the money in LGEN after my initial post as I thought I was too top heavy in pharmas. Thanks for your suggestions and views

[callmebwana] 12/1/2018 10:45

Cyfalafwr.
Please take a look at PFC. Next DIVI is April. As always DYOR. NAI.
GLA.

[bookbroker] 12/1/2018 10:39

GSK. could be a very sensible investment, at these levels it has to be a buy irrespective of EW.’s intentions, even with a dividend cut it would be good value, and it is not immune from big US pharma sniffing about!

[cyfalafwr] 12/1/2018 10:18

Sold my entire holding this morning 25% profit including the dividends ,not bad for 11 months. Can't get that in a bank deposit account.
Any suggestions in which blue chip divi paying company to put the cash , my initial thought is to top up my Glaxo holding.

[bookbroker] 12/1/2018 10:00

Irritating, when this company warned about the addition to provisions last Nov. It became a sitting duck, takeover chatter been around for a long time, had a low ball order on at 260 that morning, think it settled at 280, an offer waiting to happen, a bit like ITV at some point, it’s when that it arrives!

[willoicc] 12/1/2018 09:17

Tony Seba - YouTube videos - is predicting a massive move to electric vehicles by 2030.

On the basis that electric vehicles have a lot fewer parts than ICE vehicles. what effect will that have on GKN?

[broadwood] 12/1/2018 08:56

Cisk - Good appraisal.

Certainly the market is indicating a higher offer(s).

[cisk] 12/1/2018 08:38

GKN comprises some world-leading businesses which unfortunately I feel could be better managed. I’ve held melrose on and off for a long time and they see value in engineering. I’ve also held GKN for years. So it’s with mixed feelings I saw the news today about the offer. Melrose would I’m sure extract a far better return on assets than what is currently being earned, but obviously parts would be sold off to pay down the borrowing they will have to incur to fund the deal.

I suspect melrose will increase their offer a little (but they are very disciplined and won’t overpay). What will probably happen is that this action will flush out another bidder (probably overseas) which will pay more. And thus GKN will probably still get broken up and no longer be a UK owned / listed company. If my suspicion is correct, I hope that melrose win the day. At least it will remain a British company.

[broadwood] 12/1/2018 08:26

GKN has rejected a preliminary and unsolicited proposal from Melrose Industries and described it as 'entirely opportunistic'

The 405p per share proposal - which was received on 8 Jan - comprised 80% in new Melrose shares and 20% in cash.

GKN said the board considered the proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS, and had unanimously rejected it, having concluded that it was entirely opportunistic and fundamentally undervalued the company and its prospects.

GKN said that in addition, the proposal would materially dilute the exposure of shareholders to the meaningful upside opportunities that the board believed were present within the company.

GKN also announced that interim chief executive Anne Stevens had agreed to become the group's new CEO with immediate effect.

Chairman, Mike Turner said: 'The Board believes that Anne Stevens has the track record to transform GKN.

'After a successful turnaround of The Ford Motor Company's businesses in Mexico, Canada and South America, she was appointed as chief operating officer for the Americas where she developed the transformation plan for Ford's US business.

'Subsequently, Anne became chairman, CEO and president of Carpenter Technology.

'She was a non-executive director of Lockheed Martin from 2002 until she stepped down at the end of 2017 to take up her executive role at GKN.

'Her operational and strategic skills are ideally suited to GKN and the Board is very impressed with the contribution she has made so far in setting out plans for a significant improvement in the group's performance.'

GKN said Q4 trading was in line with forecasts and the group continues to expect 2017 management profit before tax to be slightly ahead of 2016 (which was £678 million) before the additional working capital write-off in North American Aerospace announced on 16 November 2017.

[broadwood] 12/1/2018 08:21

A challenging start for the new CE.

[broadwood] 12/1/2018 08:12

The Board confirms that on 8 January 2018 it received a preliminary and unsolicited proposal from Melrose to acquire the entire issued and to be issued share capital of GKN at a price of 405 pence per share, comprising 80% in new Melrose shares and 20% in cash (the “Proposal̶1;). Using the closing share price of Melrose of 218 pence as of 5 January (the business day prior to receipt of the Proposal) the Proposal implied an exchange ratio of 1.49 new Melrose shares for each issued and to be issued GKN share (which would result in GKN shareholders holding approximately 57% of the enlarged company and Melrose shareholders holding 43%) plus 81 pence in cash per GKN share.

The Board of GKN has considered the Proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS Limited, and has unanimously rejected it, having concluded that the Proposal is entirely opportunistic and that the terms fundamentally undervalue the Company and its prospects.
In addition, the Proposal would materially dilute the exposure of GKN shareholders to the meaningful upside opportunities that the Board believes are present within the Company.

In accordance with Rule 2.6(a) of the Code, Melrose is required, by not later than 5.00 p.m. on 9 February 2018, to either announce a firm intention to make an offer for GKN in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.
This announcement is made without the consent of Melrose.

[p1nkfish] 16/11/2017 15:26

Hope this remains British, great engineering.

[p1nkfish] 16/11/2017 15:24

There is likely something else to be exposed.
Took a small position near today's low and will add.
My take is that market weakness in general is coming and 300p breach is important.
Further weakness would be no surprise.

[bigboots] 16/11/2017 07:58

Second warning, one more to come....