Dana plans secondary listing of combined company

MAUMEE, Ohio—Dana Inc. plans for a secondary listing of Dana P.L.C., its proposed combined company with GKN's Driveline division, on the London Stock Exchange.

Dana said in a March 19 release that the plan allows for more GKN shareholders to benefit from the Dana-GKN Driveline combination, a proposed $6.1 billion deal that would create the world's largest supplier of driveline components.

Dana added that it will continue to pay a quarterly dividend of 10 cents per share to its expanded shareholder group. GKN's shareholders will own 47.25 percent of the new company with Dana shareholders owning the remaining 52.75 percent.

"The clear message from shareholders is that they want to be able to hold stock in a combined Dana P.L.C., which will be a global leader in vehicle drive systems and electrical propulsion," Jonathan Collins, Dana chief financial officer and executive vice president, said in a statement. "Through a secondary listing on the London Stock Exchange, existing shareholders of both Dana and GKN will have an opportunity to share in the success of the new company, including value created through the delivery of $235 million in annual synergies."

The move is the latest in what is becoming a fierce competition for GKN. Melrose Industries P.L.C. made what it deemed a "revised and final offer" to acquire all of GKN for about $11.2 billion. While GKN shareholders have until March 29 to accept the offer, the GKN board "unanimously rejected" the offer in a March 12 statement.

Since the offer was declared "final," it cannot be increased under British takeover rules. But Melrose has since offered to contribute about $1.4 billion toward GKN's pension fund.

Dana, as part of the proposed merger with GKN Driveline, will take on about $1 billion of net pension liabilities, in addition to sending about $1.6 billion in cash to GKN and issue 133 million new Dana P.L.C. shares to GKN's shareholders, valued at about $3.5 billion.

The bidding war has not stopped Dana from increasing its 2018 full-year financial targets—upping its sales projections by $300 million to $8.05 billion, but did not provide a guidance for its net income.

"Our continued strong financial performance—driven by our organic and inorganic sales growth and the execution of our synergy plan related to recent acquisitions—has provided us with increased confidence in our outlook for 2018, and further solidified our trajectory toward achieving our long-term targets," Collins said in a statement.