Unite reveals “wheeler dealers” to pocket huge £140m “jackpot payday” in GKN takeover

Unite reveals “wheeler dealers” to pocket huge £140m “jackpot payday” in GKN takeover

- in Unite
GKN site
Britian’s largest union says bankers, financiers, lawyers and public relations executives stand to make millions in “debt fuelled” bid for the aerospace and automotive engineering firm GKN.

Unite the Union says that the “eye-watering” sum in fees and expenses will net those involved a huge windfall that is the equivalent of winning tonight’s National Lottery jackpot 12 times over, or 83 times the average lifetime earnings of a GKN worker.

Melrose – an investment firm specialising in buying, improving and selling under-performing companies – have previously been describes as “corporate raiders” and their own bid documents for the takeover of GKN detail the extraordinary fees and expenses, with four top Melrose executives also standing to earn £285 million between them in ‘incentives’ if they boost GKN’s share price following a successful takeover.

Unite have drawn comparisons between Melrose and the “cowboy capitalists” of the 1980s, as the potential amount executives and their advisors will pocket from a successful takeover could be as much as £425 million – the equivalent of six Airbus A320 airliners whose wings GKN are contracted to work on.

The figures were released ahead of a meeting today with the business secretary Greg Clark in which Unite representatives from GKN will urge the government to block Melrose’s takeover bid in the public interest, warning that the proposed deal could harm the government’s national defence and industrial strategies.

Breakdown of fees and expenses

Unite released a full breakdown of the fees and expenses detailed by Melrose in its bid document:

  • Financing arrangements – between £6 million and £69 million depending on whether the bid succeeds
  • Financial and corporate broking advice – up to £50.5 million depending on whether the bid succeeds
  • Legal advice – estimated at £9 million
  • Accounting advice – £2 million
  • Public relations advice – between £1 million and £5 million depending on whether the bid succeeds
  • Other professional services – £1 million
  • Other costs and expenses – £3 million

Unite assistant general secretary for aerospace Steve Turner said:

The astronomical sums of money that could be pocketed by bankers, financiers and Melrose bosses from the ‘debt fuelled’ takeover of GKN would have the Gordon Gekkos of the 1980s licking their lips.

This is a bid that puts a ‘jackpot’ payday for a small number of people ahead of the long-term stability of a world a 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 added:

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 Greg Clark 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.

Unite is clear, we will not allow two sets of management to compete for the affections of shareholders by promising faster and deeper cuts. For Unite defending jobs always comes first.



Facebook Comments

You may also like

NEU criticises government after new report shows number of schools in deficit is increasing

The number of state secondary schools in England