GKN shares what next

woody2234

The deadline to accept the offer from Melrose was 29th March which I have missed so what happens to my GKN shares now, Melrose are going to delist GKN from stock exchange on 21st May 2018 and my shares are held with Shareview

bowlhead99

One option available is to sell your GKN shares over the next three weeks. Unless you want to be a tiny minority shareholder in a company owned and run by someone else who puts your interests last and for which there is no ready market for the shares.

Another is to ask Melrose to buy them off you. Sometimes, large delisted companies have a facility where the buyers will sweep up any stragglers who ask, because it's a bit of a pain to have lots of disaffected minority shareholders on their books. As you didn't accept their offer four weeks ago, and it's soon going to be a delisted company with your shares being less attractive on the open market (as there won't be an open market), they might not ultimately need to pay you the full price that they were offering for you to accept back then. The easiest thing to do would be to sell up on the open market which you could do tomorrow (they were 465.5p on Friday).

woody2234

Thanks for reply, my shares are registered with Equiniti Shareview so I have opened a portfolio account this weekend and have to wait 3 days for full access but I was hoping Melrose would send me offer to convert my GKN shares into Melrose shares

bowlhead99

woody2234 wrote: »

I was hoping Melrose would send me offer to convert my GKN shares into Melrose shares

That's not an offer they are making. You could always buy Melrose shares with the proceeds of your sale, if you like their business.

System

The offer went unconditional on the 29th March so you can still accept the offer from Melrose.

woody2234

Thankyou for replys, so I can still send the form of acceptance back to Equiniti thats good news, and I think I will go for receive additional Melrose shares instead of cash offer or maybe I sell shares and buy Tesco or Sainsburys shares

bowlhead99

woody2234 wrote: »

Thankyou for replys, so I can still send the form of acceptance back to Equiniti thats good news, and I think I will go for receive additional Melrose shares instead of cash offer or maybe I sell shares and buy Tesco or Sainsburys shares

You can send it back but as per the offer document, they don't have to accept what you put on it.

Because they made it clear on the offer document that your acceptance had to be received by 29 March ; and that even though they might keep the offer open for acceptances up to 14 days after the offer goes unconditional, they reserve the right to stop the 'mix and match' facility on 29 March. The mix and match facility is the method by which you can elect to take more shares and less cash, or vice versa, subject to them being able to find enough people in the investor base who want to take the opposite postion. They can't keep that going indefinitely and you are a month late.

Their most recent announcment (https://investegate.co.uk/melrose-industries--mro-/rns/compulsory-acquisition-of-remaining-gkn-shares/201804270700063155M/) was that now they'd secured over 90% of the GKN share capital through offer acceptances, they would proceed to the standard 'compulsory purchase' process for the remaining shares they didn't get in the first rounds of acceptances. Under that set of rules they will proceed to send out compulsory purchase notices (on the same terms as the Final Offer (i.e. the standard mix of shares and cash of their choosing, as was offered by them), and then after a six week period has expired the shares of GKN will automatically belong to Melrose and you can get your consideration (or your broker will do so, for you).

If you fill out the acceptance form you got from your broker, you *may* be able to get in as a standard acceptance before the compulsory purchase period kicks in with its annoying delay (during which time the value of Melrose shares may fall if lots of people are selling up having realised they didn't really want the Melrose shares they received by default, after all). But there is no guarantee of this (even though they will honour their offers in the end, through compulsory purchase) and no guarantee that you can get your choice of all-shares or all-cash, because the mix-and-match facility has probably already been worked through.

If you want to 'take the money and run' and buy some shares in Tesco or Sainsbury, the quickest process to become a Tesco or Sainsbury shareholder would be to sell your GKN shares on the open market this week. Of course, Tesco and Sainsbury's businesses are quite different to GKN and Melrose's - they are not engineering businesses so may come across as strange choice as the 'next thing' to buy ahead of tens of thousands of other listed companies around the world. Sainsbury's could be interesting on the back of this weekend's announcement of potential merger with Asda, but you will probably miss the major initial price action there if you're not buying until the end of this week.