Westland shares soar 40p above GKN's hostile bid price

WESTLAND continued to soar away from the clutches of GKN's hostile pounds 496m bid yesterday as its shares rose 7.5 per cent and the management of the West Country helicopter manufacturer issued a defiant rejection of the offer.

The shares ended the day 23p higher at 330p - 40p above GKN's offer price - as the stock market bet on improved terms or a rival bid. GKN shares, in contrast, fell 16p to close at 566p.

Earlier the Westland board, led by Alan Jones, chief executive, had urged shareholders to reject GKN's offer, saying it would be contested vigorously.

It said the bid lacked strategic logic, failed to value Westland properly and deprived shareholders of the full benefits of a potential pounds 400m legal settlement sought from a group of Arab countries.

Mr Jones added: 'The GKN bid brings nothing extra to Westland that it does not already possess. Its offers clearly undervalue the business and appear principally designed to address GKN's tax problems.'

Paddy Ashdown, the Liberal Democrat leader and, as member for Yeovil, Westland's local MP, also urged shareholders to reject GKN's bid, describing Westland's independence as essential. The bid, he said, was 'clearly not in the interests of the employees, the shareholders, the firm or the nation's defence industries'.

GKN had underestimated the value of the company, failed to give assurances about the future of the workforce and was not promising to maintain the product range. 'I can see no economic or market logic behind this bid,' he added.