Reports say that GKN has rejected a takeover offer and is instead proceeding with plans to restructure its operations.

Reuters reported that GKN rejected an unsolicited offer from manufacturing investor company Melrose and has set out plans to split its business in two (aerospace and automotive) as it recovers from a turbulent period that has included a profit warning.

Reuters noted that the offer sent shares in GKN up 20% in early Friday trading in London.

"The board of GKN has considered the proposal ... and has unanimously rejected it, having concluded that the proposal is entirely opportunistic and that the terms fundamentally undervalue the company and its prospects," it said in a statement reported by Reuters.

Engineering company GKN is long established in the UK and internationally with aerospace and automotive operations.

In November, the company announced that its CEO designate Kevin Cummings was leaving the company with immediate effect following a profit warning brought about by difficulties on US aerospace operations. Cummings had been lined up to take over from veteran CEO Nigel Stein but the company announced large write-off concerning working capital across aerospace plants in North America.

GKN said earlier this month it has now appointed Anne Stevens to run the group on a permanent basis after she took up the role of interim CEO in November.