Statement re GKN pension schemes

GKN PLC - Statement re GKN pension schemes

PR Newswire

London, March 13

LEI: 213800QNZ22GS95OSW84

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

13 March 2018

GKN plc (“GKN”) Statement re. GKN Pension Schemes

The Board of GKN (the “Board”) has noted the further announcement made yesterday evening by the trustees (the “Trustees”) of the GKN UK pension schemes (the “Schemes”). A copy of the Trustees’ announcement is set out in the Appendix below.

The Board considers that the Trustees’ announcement:

exposes the misleading statements made by Melrose in its revised offer announcement yesterday. In particular, the Trustees have made it clear that GKN’s proposals would leave the UK pension schemes fully funded on an IAS 19 basis. In other words, the UK deficit in our world-class Aerospace business would be entirely eliminated;

emphasises that GKN’s proposals provide “....appropriate mitigation to the Schemes and that they are in the best interest of the Schemes’ members”;

demonstrates that Melrose has not kept shareholders informed about its dialogue with the Trustees and that it has failed to make proposals to address the key concerns that the Trustees have raised, despite this hostile takeover approach being in its 10th week;

confirms that Melrose, despite its assertions to the contrary, is not demonstrating a responsible approach to the serious issue of protecting the long term interests of GKN’s pensioners; and

underscores Melrose’s lack of credibility as a suitable custodian for GKN’s businesses.

Anne Stevens, Chief Executive of GKN said:

“Melrose’s failure to engage effectively with the Trustees on such a crucial topic as the future of the GKN pension schemes only confirms our view that Melrose, with its financial buyer model, is not an appropriate owner of GKN.

The Trustees’ statement illustrates that, unlike Melrose, GKN has properly addressed the pension issues facing the company and, as we eliminate the UK deficit, we look forward to our Aerospace business further re-rating in line with its peers.”

Contacts:

GKN plcGuy Stainer, Investor Relations Director Tel: +44 (0)20 7463 2382 

FTI ConsultingAndrew Lorenz / Richard MountainTel: +44 (0)20 3727 1340

Gleacher Shacklock (Financial Adviser to GKN plc)Tim Shacklock, Dominic Lee, Tom Quinn Tel: +44 (0)20 7484 1150

J.P. Morgan Cazenove (Financial Adviser and Corporate Broker to GKN plc)Robert Constant, Dwayne Lysaght, Stephen Smith Tel: +44 (0)20 7742 4000

UBS (Financial Adviser and Corporate Broker to GKN plc)Hew Glyn Davies, James Robertson, Jonathan Retter Tel: +44 (0)20 7567 8000

Further information

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Gleacher Shacklock LLP ("Gleacher Shacklock"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to GKN and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than GKN for providing the protections afforded to clients of Gleacher Shacklock or for providing advice in connection with the subject matter of this announcement or any other matter referred to herein.

J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) (“J.P. Morgan Cazenove”) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to GKN and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than GKN for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

UBS Limited ("UBS") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom. UBS is acting exclusively as financial adviser to GKN and no one else for the purpose of the consideration of a proposed acquisition by Melrose and will not be responsible to anyone other than GKN for providing the protections offered to clients of UBS nor for providing advice in relation to the subject matter of this announcement or any transaction, arrangement or other matter referred to herein.

Disclosure requirements of the City Code

Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel’s website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be published on the GKN website (www.gkn.com) by no later than 12 noon on the business day following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

APPENDIX

Statement from the Trustees of the GKN Group Pension Schemes

For Immediate Release: 12 March 2018

Statement from the Trustees of the GKN Group Pension Schemes

“The Trustees have noted the comments made today by Melrose in relation to the pension arrangements agreed as part of the GKN Driveline / Dana combination. Under these arrangements, GKN will make very substantial cash contributions to the Schemes which will be sufficient to make the Schemes fully funded on an IAS 19 basis.

“The Trustees have taken extensive financial, legal and actuarial advice in relation to these arrangements and have satisfied themselves that they provide appropriate mitigation to the Schemes and that they are in the best interests of the Schemes’ members.

“The Trustees have had a number of discussions with Melrose but have yet to receive proposals which address the key concerns that the Trustees have raised. The Trustees would very much like to progress these discussions.”

For further media enquiries:

Alistair Kellie / Andrew Adie, Newgate Communications

020 7680 6550 or [email protected]

Notes to Editors:

The GKN Pension Schemes include GKN Group Pension Scheme 2012 and the GKN Group Pension Scheme 2016.

Membership of the Schemes totals 32,337 as of 5 April 2017. This includes 5,105 active employees, 9,899 deferred members and 17,333 pensioners.