LONDON (Reuters) - Troubled British engineer GKN (GKN.L) has rejected an unsolicited offer from rival Melrose (MRON.L) and set out plans to split its business in half to improve performance as it recovers from a profit warning.
The offer, valuing the business at 405 pence ($5.48) per share, sent shares in GKN up 20 percent to 398 pence in early Friday trading.
Employing 58,000 people across 30 countries in aerospace and automotive engineering, 258-year-old GKN stunned the market in October when it cut its profit outlook due to problems in the aerospace division.
The downturn led to the dismissal of the Aerospace head, Kevin Cummings, who had been due to takeover as the future group chief executive in January.
GKN said on Friday it had now appointed Anne Stevens to run the group on a permanent basis after she took up the role of interim CEO in November.
“The board of GKN has considered the proposal ... and has unanimously rejected it, having concluded that the proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects,” it said.
It will now work on plans to split the business between its aerospace and automotive divisions.
GKN added that it was trading in line with expectations.
($1 = 0.7385 pounds)
Reporting by Kate Holton; editing by Costas Pitas