GKN has revealed that as part of its deal to combine its driveline business with Dana, the Redditch company will transfer £1.3bn of gross pension and post-retirement medical scheme liabilities and £818m of pre-tax deficit.
The announcement comes as GKN hits back at the takeover bid by announcing that once it sells its Driveline business to the United States firm Dana, the resulting company will have a secondary listing on the London stock exchange as well as a primary listing in NY.
Reuters reported yesterday that Columbia Threadneedle, a top-10 GKN shareholder, had said that it would vote against the Melrose deal.
"Now it appears to have unveiled a £1 billion plan that would achieve less than GKN's own agreement with the Trustees", GKN Group Finance Director Jos Sclater commented in the statement.
Workers" union Unite has said it has "no confidence' in Melrose Industries' strategy to takeover Redditch-headquartered GKN.
"The proposal we have made to the trustees of up to GBP1bn of contributions under our ownership is a clear example of what Melrose does which is good for pensioners and shareholders alike and shows we are a good custodian for all stakeholders".
Meanwhile, the unions who represent GKN employees across the United Kingdom will grill Melrose over its plans for the company, when they meet today.
However, with characteristic bluntness, Melrose has dismissed GKN's move as "hastily-assembled and ill-considered proposals", which would "destroy" potential value and add significant risk, not just for shareholders but in the underlying businesses themselves.
"A month ago, Melrose appeared to suggest that its plan to pay £150m into the pension was sufficient", he said.
Yesterday's meeting followed recent warnings from GKN's biggest customer, Airbus that it would be "practically impossible" for it to give GKN any new work should Melrose succeed with its debt-laden takeover bid because of the uncertainty generated by its short-term approach.
"I think our shareholders deserve better".
"After a full and frank exchange with Melrose, we received no sense that key personnel with the right experience are in place to manage the aerospace and automotive divisions".