GKN promised on Monday a quick cash handout for shareholders if they back an improved takeover offer for its auto business, in a final role of the dice aimed at seeing off a hostile bid for the whole company.
In one of Britain's most tightly fought corporate battles for years, shareholders have until 1200 GMT on Thursday to support the hostile bid from turnaround specialist Melrose, or GKN's plan to split off its auto unit and combine it with U.S. group Dana, leaving GKN focused on aerospace.
Melrose's bid has so far split GKN shareholders, with two of the largest publicly coming out on opposite sides. Analysts predict the deal will go down to the wire.
On Monday, Dana said it would pay an additional $140 million in cash to GKN for its Driveline auto business.
In response, GKN said it would return up to 700 million pounds in cash to shareholders as soon as practicable, as part of an already announced 2.5 billion pound cash return programme from the Dana sale and the planned divestment of its powder metallurgy unit.
That compares with Melrose's offer of 81 pence in cash for each GKN share plus 1.69 new Melrose shares, which would hand shareholders 1.4 billion pounds and 60 percent of the enlarged Melrose — a bid worth 7.8 billion pounds in total.
Should they back GKN management's plan, GKN shareholders would end up with 47.25 percent of the enlarged Dana group, which would be listed in both the U.S. and London.