Dana, Melrose Sweeten Offers for GKN

The two suitors for British engineering company GKN plc have upped their offers ahead of a March 29 deadline.

Melrose Industries plc, which hopes to acquire the entire company, began the bidding in January with a hostile takeover offer of £7.4 billion ($10.4 billion). GKN has opposed the bid.

Today Melrose sweetened its “final” bid of £8.1 billion ($11.4 billion) by offering to hike its contribution to GKN’s pension plan to £1 billion ($1.4 billion) from £210 million. The turnaround firm also dropped its tendered shares acceptance ratio from 90% to 50% plus one share.

GKN management favors a separate, $6.1 billion plan to merge its drivetrain business with Ohio-based Dana Inc. The merger would create a company 49% owned by current GKN shareholders, headquartered in the U.S. but domiciled in the U.K. for tax purposes. The scheme would leave the remainder of GKN to focus on its aerospace business.

Today Dana confirmed that, if its proposal is accepted, it will seek a secondary listing in London. Some GKN shareholder groups asked for the U.K. listing because they are required to invest in British companies.

Dana also promises that current GKN investors would receive the American company’s current-quarter dividend of 10 cents per share.