Sunday 16 December 2018

Huge payday for bankers if GKN takeover goes ahead – union

Unite claims bankers, lawyers and financiers are in line to share a £140m windfall if Melrose’s bid succeeds, and urged the Government to block it.

Payday for some over GKN takeover bid, says Unite
Payday for some over GKN takeover bid, says Unite

By Alan Jones, Press Association Industrial Correspondent

Bankers, financiers, lawyers and public relations executives stand to make around £140 million if Melrose succeeds in its bid for engineering firm GKN, a union has claimed.

Unite said the “eye-watering” sum includes up to £69 million in financing arrangements, up to £50 million for financial advice, £9 million for legal advice and millions on public relations and professional services.

Unite, which is opposed to any takeover, said the total amount is more than 80 times the average total lifetime wage of a GKN worker.

This is a bid that puts a ‘jackpot’ payday for a small number of people ahead of the long-term stability of a world-class engineering firm Steve Turner, Unite

The union said the figures were detailed in Melrose’s bid document and would be on  top of any “incentives” for company executives following any successful takeover.

Unite officials will meet Business Secretary Greg Clark on Wednesday and urge him to block Melrose’s bid.

Unite assistant general secretary Steve Turner said: “This is a bid that puts a ‘jackpot’ payday for a small number of people ahead of the long-term stability of a world-class engineering firm and the thousands of workers who make it a success.

“The Government needs to stop this takeover and prevent the wealth of the firm being stripped and funnelled into the pockets of wheeler-dealers at the expense of GKN workers’ livelihoods.”

Unite assistant general secretary for manufacturing Tony Burke said: “GKN is at the cutting edge of electric vehicle technology and aerospace engineering. It is a vital component in making the UK Government’s industrial strategy a success and integral to UK defence interests.

“The short-term desire of a few to rake in millions through this takeover puts all this at risk. There is a real danger, if the takeover succeeds, that long-term investment will dry up, leading to cuts in research and development and the UK’s defence capability being harmed.

“The Business Secretary must use the power he has to act in the national interest and intervene to block this bid, as well as strengthening takeover laws to ensure public and social interests are put first.”

Rebecca Long Bailey, shadow business secretary, said: “It is deeply worrying that corporate elites could make eye-watering sums from the takeover of one of Britain’s biggest engineering and manufacturing businesses.

“This takeover bid could risk weakening Britain’s industrial base and diminishing our national defence capabilities, as well as potentially threatening thousands of jobs.

“The Government should intervene and take a closer look at Melrose’s bid. They cannot sit back and allow for such takeovers to go ahead without appropriate oversight and investigation.”

David Roper, executive vice chairman of Melrose, said: “I am pleased to confirm that these concerns are unfounded.

“Investment for the long-term and R and D spending are at the heart of the Melrose business model. Like GKN we spend roughly 4% of sales on R and D and we have invested almost £250 million in the businesses we have acquired in the past five years.

“Industrial excellence and improving the individual businesses so that they can innovate and compete in the modern business environment are our main priorities at Melrose.”

Press Association

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