GKN has rejected a preliminary and unsolicited £7bn takeover proposal from Melrose Industries and described it as 'entirely opportunistic'
The 405p per share proposal - which was received on 8 Jan - comprised 80% in new Melrose shares and 20% in cash.
GKN said the board considered the proposal together with its financial advisers, Gleacher Shacklock, J.P. Morgan Cazenove and UBS, and had unanimously rejected it, having concluded that it was "entirely opportunistic and fundamentally undervalued the company and its prospects".
GKN said that in addition, the proposal would materially dilute the exposure of shareholders to upside opportunities that the board believed were present within the company.
Melrose, meanwhile, said its offer represented a premium of approximately 24% over the closing share price of GKN on 5 January 2018.
"Melrose believes that there would be significant operational and commercial benefits arising from Melrose's ownership of GKN's businesses, reversing a history of existing GKN management not delivering on margin targets," the company said.
GKN also announced that interim chief executive Anne Stevens had agreed to become the group's new CEO with immediate effect.
Chairman, Mike Turner said: "The board believes that Anne Stevens has the track record to transform GKN."
"After a successful turnaround of The Ford Motor Company's businesses in Mexico, Canada and South America, she was appointed as chief operating officer for the Americas where she developed the transformation plan for Ford's US business."
"Her operational and strategic skills are ideally suited to GKN."
GKN said Q4 trading was in line with forecasts and the group continued to expect 2017 management profit before tax to be slightly ahead of 2016 (which was £678 million) before the additional working capital write-off in North American Aerospace announced on 16 November 2017.
(LON:GKN) GKN PLC share price was +88.95p at 421.65p
(LON:MRO) Melrose PLC share price was +6.75p at 221.75p