GKN rocked as senior director steps down in thick of Melrose £7 billion battle

Engineering giant GKN’s battle to fend off a £7 billion hostile bid from rival Melrose took a shock twist on Tuesday as a senior director stood down with just weeks to go until the final deadline.

Richard Parry-Jones is stepping down with immediate effect from the role of senior independent director but will remain on the board. The business said his move was not related to Melrose’s offer.

Parry-Jones will be replaced by non-executive director Angus Cockburn.

Separately, Melrose didn’t appear fighting fit today as it reported a £28 million loss for the year ending December 31, but which narrowed from a £69 million loss a year earlier.

However, the turnaround specialist, which has built a reputation for snapping up struggling businesses in the industry and turning them around, said it was fit to go ahead with its bid as revenues more than doubled to £1.2 billion on the back of its acquisition of heating and security company Nortek. GKN’s shares were up 1.1p to 415.7p, and Melrose edged up 1.3p to 224p.

GKN’s chairman Mike Turner said in a letter to shareholders last week that Melrose’s bid was “low price and high risk” and he pledged to return £2.5 billion to investors over the next three years in an attempt to appease them.

Labour leader Jeremy Corbyn was expected to hit out at Melrose today, warning that “a valuable company could be sacrificed so a few can make a quick buck.”