29 03 2018 Financial

Recommendation to accept offer

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.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

29 March 2018

GKN plc ("GKN")

Recommendation to accept offer

The Board of GKN (the “Board”) notes the announcement released on 29 March 2018 by Melrose Industries PLC (“Melrose”) that, pursuant to Melrose’s unsolicited offer to acquire the entire issued and to be issued share capital of GKN (the “Offer”), as at 1.00pm (London time) on 29 March 2018, Melrose had received valid acceptances in respect of a total of 901,318,533 GKN shares, representing approximately 52.43 per cent of the voting rights of GKN and the Offer has been declared unconditional as to acceptances.

The Board of GKN, which has been so advised by Gleacher Shacklock, J.P. Morgan Cazenove and UBS Limited (the “Advisers”) as to the financial terms of the offer, has made it clear that it considers the Offer fundamentally undervalues GKN. In providing their financial advice to the Board, the Advisers have taken into account the Board's commercial assessments. However, the Board recognises that, in the event that the Offer is declared wholly unconditional, Melrose would acquire control of GKN. The level of acceptances as at 1.00pm today was approximately 52.43 per cent. If the level of acceptances reaches 75%, Melrose has stated that it intends to take steps to delist the company. This could leave shareholders with a minority interest in an unlisted company, with the liquidity and marketability of GKN shares significantly reduced as a result.

Accordingly, the Board now recommends that, in the event that the Offer is declared wholly unconditional by Melrose, shareholders accept the Offer, as the GKN directors intend to do in respect of their own beneficial holdings. Gleacher Shacklock and UBS Limited are providing independent financial advice to the Board for the purposes of Rule 3 of the City Code.

The Offer will remain open for acceptance until further notice, and not less than 14 calendar days’ notice will be given in respect of the closure of the Offer. Full details of how to accept the Offer are set out in Melrose’s final offer document, published on 13 March 2018.

The Board of GKN now intends to work with Melrose to ensure the success of the enlarged company, in the interests of all stakeholders, including employees, customers and shareholders.

 

Contacts:

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

FTI Consulting
Andrew Lorenz / Richard Mountain
Tel: +44 (0)203 727 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

Person responsible

The person responsible for arranging the release of this announcement on behalf of the Company is Kerry Watson, Company Secretary (+44 (0)1527 517715).

Publication on a website

In accordance with Rule 26.1 of the City Code on Takeovers and Mergers (the “City Code”), a copy of this announcement will be published on the GKN website (Error! Hyperlink reference not valid.) 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.

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.

IMPORTANT DISCLAIMER

The offer (the "Offer") by Melrose Industries PLC (“Melrose”) for GKN plc (“GKN”)

ACCESS TO THESE MATERIALS MAY BE RESTRICTED UNDER SECURITIES LAWS OR REGULATIONS IN CERTAIN JURISDICTIONS. THIS NOTICE REQUIRES YOU TO CONFIRM CERTAIN MATTERS (INCLUDING THAT YOU ARE NOT RESIDENT IN SUCH A JURISDICTION), BEFORE YOU MAY OBTAIN ACCESS TO THE INFORMATION ON THIS AREA OF THE WEBSITE. THESE MATERIALS ARE NOT DIRECTED AT OR INTENDED TO BE ACCESSIBLE BY PERSONS RESIDENT IN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION OR WOULD RESULT IN A REQUIREMENT TO COMPLY WITH CONSENT OR OTHER FORMALITY WHICH TARGET REGARDS AS UNDULY ONEROUS (A “RESTRICTED JURISDICTION”).

THESE MATERIALS CONTAIN INFORMATION (THE "INFORMATION") PUBLISHED BY GKN RELATING TO THE OFFER IN COMPLIANCE WITH THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THE INFORMATION IS BEING MADE AVAILABLE IN GOOD FAITH AND FOR INFORMATION PURPOSES ONLY, AND ITS AVAILABILITY IS SUBJECT TO THE TERMS AND CONDITIONS SET OUT BELOW.

Access to the Information

You are attempting to view the Information contained in these materials.

If you would like to view the Information contained in these materials, please read this notice carefully. This notice applies to all persons who view the Information contained in these materials and, depending on where you are located, may affect your rights or responsibilities. GKN reserves the right to amend or update this notice at any time and you should, therefore, read it in full each time you visit this Microsite. In addition, the contents of this part of the website may be amended at any time, in whole or in part, at the sole discretion of GKN.

To allow you to view information about the Offer, you must read this notice and then click "I ACCEPT". If you are unable to agree, you should click "I DECLINE" and you will not be able to view information about the Offer.

These materials are made available in good faith and for information purposes only and is subject to the terms and conditions set out in this disclaimer. Any person seeking to access these materials represents and warrants to GKN that they are doing so for information purposes only.

The Information contained in materials does not constitute an offer to sell or otherwise dispose of or an invitation or solicitation of any offer to purchase or subscribe for any securities pursuant to the Offer or otherwise in any jurisdiction in which such offer or solicitation is unlawful. The Offer would be made solely by means of an offer or scheme document which would contain the full terms and conditions of such Offer, including details on how it may be accepted. Any decision made in relation to the Offer should be made solely and only on the basis of the information provided in the offer document (or scheme document).

Overseas jurisdictions

This Information is not directed at or intended to be accessible by persons resident in any Restricted Jurisdiction.

Viewing the Information you are seeking to access may be restricted under securities laws in certain jurisdictions. All persons resident outside of the United Kingdom (the “UK”) who wish to view the Information contained in these materials must first satisfy themselves that they are not subject to any local requirements which prohibit or restrict them from doing so and should inform themselves about, and observe, any legal or regulatory requirements applicable in their jurisdiction.

YOU SHOULD NOT DOWNLOAD, MAIL, FORWARD, DISTRIBUTE, SEND OR SHARE THE INFORMATION OR DOCUMENTS CONTAINED ON THIS MICROSITE TO ANY PERSON. IN PARTICULAR, YOU SHOULD NOT MAIL, FORWARD, DISTRIBUTE OR SEND THE INFORMATION OR DOCUMENTS CONTAINED THEREIN TO ANY RESTRICTED JURISDICTION.

These materials contain information that has been prepared for the purposes of complying with English law and the Code and the Information disclosed may not be the same as that which would have been disclosed if this Information had been prepared in accordance with the laws and regulations of any jurisdiction outside of England and Wales.

It is your responsibility to satisfy yourself as to the full observance of any relevant laws and regulatory requirements. If you are not permitted to view the Information in these materials, or are in any doubt as to whether you are permitted to view the Information, you should not continue to seek to access the Information.

Additional U.S. information

The Offer relates to the securities of a UK company and is subject to UK procedural and disclosure requirements that are different from those of the United States (the “U.S.”). Any financial statements or other financial information included in this Microsite may have been prepared in accordance with non-U.S. accounting standards that may not be comparable to the financial statements of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the U.S. It may be difficult for U.S. holders of shares to enforce their rights and any claims they may have arising under the U.S. federal securities laws in connection with the Offer, since Melrose and GKN are located in a country other than the U.S., and some or all of their officers and directors may be residents of countries other than the U.S. U.S. holders of shares may not be able to sue Melrose and GKN or their respective officers or directors in a non-U.S. court for violations of the U.S. securities laws. Further, it may be difficult to compel Melrose and GKN and their respective affiliates to subject themselves to the jurisdiction or judgment of a U.S. court.

You should be aware that Melrose may purchase or arrange to purchase GKN shares otherwise than under any offer or scheme related to the Offer, such as in open market or privately negotiated purchases.

The Offer may be implemented under a scheme of arrangement provided for under English company law. If so, it is expected that any securities to be issued under the Offer would be issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the "US Securities Act"), provided by Section 3(a)(10) thereof and also would not be subject to the tender offer rules under the US Securities Exchange Act of 1934, as amended (the “US Exchange Act”).

Alternatively, the Offer may be implemented by way of a takeover offer under English law. If so, any securities to be issued under the Offer may be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Rule 802 thereunder. Alternatively, any securities to be issued under the Offer may be registered under the US Securities Act. If the Offer is implemented by way of a takeover offer, it will be done in compliance with the applicable rules under the US Exchange Act, including any applicable exemptions provided under Rules 14d-1(c) and 14d-1(d) thereunder.

Holders of GKN securities are urged to read any documents related to the Offer filed, furnished or to be filed or furnished with the U.S. Securities and Exchange Commission (the "SEC") because they will contain important information regarding the Offer and any related offer of securities. Such documents will be available free of charge at the SEC's website at www.sec.gov. Nothing in this area of the website shall be deemed an acknowledgement that any SEC filing is required or that an offer requiring registration under the US Securities Act may ever occur in connection with the Offer.

Forward-Looking Statements

These materials may contain certain forward-looking statements with respect to the financial condition, results of operations and businesses of GKN and the GKN Group (being GKN and its subsidiaries and subsidiary undertakings).

All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of GKN and the GKN Group to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions, including as to future potential cost savings, synergies, earnings, cash flow, return on capital employed, production and prospects. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", “pursue”, "may", "objectives", "outlook", "plan", "probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases.

There are a number of factors that could affect the future operations of GKN and the GKN Group and could cause those results to differ materially from those expressed in the forward-looking statements included in these materials. These factors include, but are not limited to: (a) changes in demand for the GKN Group products; (b) currency fluctuations; (c) loss of market share and industry competition; and, (d) changes in general economic, business and political conditions, including changes in the financial markets. All forward-looking statements contained in these materials are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in GKN’s annual report and accounts (available on the GKN website). These factors also should be considered by the reader.

Each forward-looking statement speaks only as at the specified date of the relevant document within which the statement is contained. None of GKN or the GKN Group undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in these materials.

Unless expressly stated otherwise, no statement contained, or referred to, in these materials is intended to be, or should be construed as, a quantified financial benefits statement, profit estimate or profit forecast.

Cautionary statement – Proposed Transaction

These materials contain forward looking statements which are made in good faith based on the information available at the time of its publication. The forward-looking statements contained in these materials may include statements about the expected effects of the proposed combination of GKN's Driveline business and Dana Incorporated (“Dana”) (the "Proposed Transaction”) on GKN, Dana, Dana plc and/or GKN Aerospace, the anticipated timing and benefits of the Proposed Transaction, GKN’s and Dana’s anticipated standalone financial results and all other statements in this document other than statements of historical facts. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "positioned," "strategy," "future" or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. It is believed that the expectations reflected in these statements are reasonable but they are based upon a number of assumptions that are subject to change and they may be affected by a number of risks and uncertainties that are inherent in any forward looking statement which could cause actual results to differ materially from those currently anticipated. Such risks, uncertainties and assumptions include: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the satisfaction of the conditions to the Proposed Transaction and other risks related to completion and actions related thereto; GKN’s and Dana’s ability to complete the Proposed Transaction on the anticipated terms and schedule, including the ability to obtain shareholder or regulatory approvals of the Proposed Transaction; the ability of the parties to integrate successfully GKN Driveline with the business of Dana following the consummation of the Proposed Transaction and to realize the anticipated synergies (including any anticipated tax synergies) and other benefits expected from the Proposed Transaction; the effects of government regulation on GKN's or Dana's businesses; the risk that disruptions from the Proposed Transaction will harm GKN's or Dana's business; the effect of the communication of the Proposed Transaction on the ability of GKN and Dana to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; potential litigation in connection with the Proposed Transaction; and other factors detailed in GKN’s Annual Report and Accounts 2017 and Dana’s reports filed with the SEC, including its Annual Report on Form 10-K under the caption "Risk Factors". Nothing in this document should be regarded as a profit forecast. Forward-looking statements included herein are made as of the date hereof, and none of GKN, Dana or Dana plc undertakes, and each expressly disclaims, any obligation to update publicly such statements to reflect subsequent events or circumstances.

No offer or solicitation

These materials shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Additional information and where to find it

These materials may be deemed to be solicitation material in respect of the Proposed Transaction. The Proposed Transaction will be submitted to a vote of Dana’s stockholders and a vote of GKN’s shareholders. In connection with the Proposed Transaction, it is intended that Dana plc will file with the SEC a registration statement on Form S-4, containing a prospectus with respect to Dana plc's ordinary shares to be issued in the Proposed Transaction (the “Prospectus”) and a proxy statement for Dana's stockholders (the "Proxy Statement"), and Dana will mail the Proxy Statement to its stockholders and file other documents regarding the Proposed Transaction with the SEC. Further, it is intended that GKN will mail a circular to its shareholders (the “Circular”) containing further details in relation to the Proposed Transaction and notice of the general meeting. DANA’S SECURITYHOLDERS AND GKN’S SHAREHOLDERS ARE URGED TO CAREFULLY READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROSPECTUS AND THE PROXY STATEMENT, AND THE CIRCULAR WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PARTIES, THE PROPOSED TRANSACTION AND DANA PLC. Investors will be able to obtain copies of the Prospectus and the Proxy Statement as well as other filings containing information about Dana, without charge, at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by GKN will be made available free of charge on GKN’s Investor Relations Website. Copies of documents filed with the SEC by Dana or Dana plc will be made available free of charge on Dana’s Investor Relations Website.

Participants in the solicitation

GKN and its directors and executive officers, and Dana and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Dana common stock in respect to the Proposed Transaction. Information about the directors and executive officers of GKN is set forth in GKN’s Annual Report and Accounts 2017. Information about the directors and executive officers of Dana is set forth in the definitive proxy statement for Dana’s 2018 Annual Meeting of Stockholders, which was filed with the SEC on March 22, 2018. Investors may obtain additional information regarding the interests of such participants by reading each of the Prospectus and the Proxy Statement and the Circular regarding the Proposed Transaction when it becomes available.

Responsibility

In relation to any Offer-related materials accessible on this area of the website please note any statement of responsibility contained therein.

The documents included in these materials issued or published by GKN speak only at the specified date of the relevant document and GKN has, and accepts, no responsibility or duty to update or revise such documents.

In relation to any such announcements or other Offer-related materials issued or published by Melrose, or which relate to Melrose and the Melrose Group, that are accessible on this website, the only responsibility accepted by GKN and its directors is for the correctness and fairness of its reproduction.

Neither the directors of GKN, nor GKN, nor any of their affiliated companies, have reviewed, and no such person is or shall be responsible for or accepts any liability in respect of, any information contained on any other website which may be linked to or from these materials.

Other

If you are in any doubt about the contents of these materials or the action you should take, you should seek your own financial advice from an independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) or, if you are located outside the UK, from an appropriately authorised independent financial adviser.
This notice shall be governed by and construed in accordance with English law.

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