MAUMEE, Ohio—GKN P.L.C.'s shareholders have accepted a rival takeover proposal from Melrose Industries P.L.C. rather than a proposal to merge its Driveline division with Dana Inc.
On March 29, shareholders for GKN accepted Melrose's $11.2 billion offer to take over all of GKN.
GKN confirmed in an email that shareholders voted 52.43 percent in favor of the Melrose bid as of 1 p.m., England time, however it added that it believes the offer "fundamentally undervalues GKN."
"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," GKN said. A spokesman added that the company had no further comment.
Dana said in a statement that the vote means its proposed merger with GKN Driveline is unlikely to proceed.
"We are, of course, disappointed by today's outcome and continue to believe Dana would be the best owner and operator of GKN Driveline," James Kamsickas, Dana president and CEO, said in a statement. "This has always been an opportunity, not a required or critical asset. Dana is a strong, thriving company, and we will continue our focus on the execution of our enterprise strategy, delivering for our customers and remaining responsible stewards of our shareholders capital."
The move means Melrose will assume control of both the Driveline and Aerospace divisions. Melrose could not be reached for comment, but GKN added in its statement that if the level of acceptance reaches 75 percent, Melrose intends to delist the company.
Dana and GKN had reached an agreement March 8 to form Dana P.L.C.—a combination of Dana Inc. and GKN's Driveline division, of which Dana shareholders would have owned own 52.75 percent and GKN's shareholders the remaining 47.25 percent. The deal would have created the world's largest supplier of driveline components, according to the firms.
Both Dana and Melrose had upped the ante for GKN's shareholders in the weeks leading up to the vote. Most recently, Dana increased the cash element of its offer by $140 million, boosting it to $1.77 billion total and raising the overall value of the offer to more than $6.2 billion. Dana also said it would double the size of its share repurchase to $200 million.