Investor company Melrose has issued a 'final offer' as part of its hostile bid to take control of GKN. The latest bid has been increased by around 10%.

It said that all recent attempts to engage in constructive discussions have been refused by the GKN board and that a proposed tie-up between GKN and Dana is 'in our view, a bad deal for other stakeholders'.

Melrose said the new offer (81 pence plus a 1.69 new Melrose share for each GKN share) won't be increased under any circumstances. The deadline for acceptances is 1.00 p.m. on Thursday, 29 March. The previous offer - described by GKN as 'derisory' - was 81 pence plus 1.49 new Melrose shares.

GKN said in response it was evaluating the new offer.

Melrose said in a letter from its chairman that GKN shareholders can join it on a 'journey of value creation by investing in a UK listed manufacturing powerhouse worth over £10 billion today and receiving £1.4 billion of cash.'

It described the board of GKN as attempting a hasty fire-sale of GKN businesses before they have been given a chance to reach their potential and 'with damaging consequences, we believe, for all stakeholders'.

The potential transaction with Dana, Melrose maintains, leaves GKN shareholders with a minority stake in a foreign listed group run by a Dana management team based in Ohio. 'Many of you may not be able to hold the shares being offered by Dana as part of the consideration as they will not be listed in the UK,' it said.

Melrose also warned that private UK shareholders should also be aware that they would be liable to income tax on the value of any new Dana shares they receive and the transaction would 'involve a lengthy and uncertain completion process, including anti-trust clearances in the EU, US and China, as well as Dana's shareholder approval, which is not expected until the last quarter of 2018'.

See also: Dana and GKN Driveline sign agreement for merger