GKN delivers knock-out blow against Westland: Victory comes from offer increase valuing target at pounds 577m
Thursday 31 March 1994
GKN, which had spoken for 45 per cent of Westland's shares, delivered its knock-out blow in the battle for control of Westland as the stock market opened yesterday. It announced an increase in its terms from 290p to 355p a share.
Purchases of shares on the stock market gave GKN control of more than 50 per cent of Westland by mid-morning and at the close of business yesterday its holding in the company had risen to 54.4 per cent.
Once GKN receives the necessary documents it will declare its offer to be unconditional.
Westland's two largest institutional shareholders, M&G and Schroder Investment Management, which own 25 per cent of the company between them, have not accepted the offer from GKN and are considering whether to remain minority shareholders in the company.
After failing to gain Westland's agreement to an increased offer at meetings on Tuesday, GKN went over the heads of the Westland board.
The board, led by the chairman, Alan Jones, will comment on the outcome of the bid campaign once GKN declares its offer unconditional.
Westland has argued persistently that GKN undervalued the company's prospects. Westland projected a rise in helicopter deliveries from one this year to 39 a year by 2000, based on rising production of one of its models, the EH101 helicopter.
Sir David Lees, chairman of GKN, said yesterday that, while his board considered Westland's prospects to be indeed good, they were highly uncertain. He said there were substantial risks in turning Westland's prospects into profits.
He said that, based on all the information available to GKN's board, 335p was the maximum value that could be placed on Westland's shares.
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