Either way, British press reports say Melrose's approximately $10.2 billion bidsignals big changes for the company, which ranks No. 37 on Automotive News' list of the top 100 global suppliers, with original equipment parts sales of $6.74 billion in 2016.
On announcing Stevens as CEO, the company acknowledged that profits and cash flow had been below expectations, despite sales growth. It said GKN has embarked on a two-year campaign to improve profits by focusing attention on its three core businesses — aero engines, constant velocity joints and advanced vehicle technologies — and considering the possibility of spinning off its aerospace operations.
Last week, the company sweetened the prospect for resisting Melrose's effort by saying GKN will return $3.5 billion in cash to shareholders over the next three years, partly by selling off its powdered metallurgy business.
Adding to the drama: GKN is suddenly on a hot streak with its advanced electric driveline, or eDrive.
Analysts believe GKN made itself vulnerable when it indicated plans to spin off aerospace. But GKN argues that Melrose lacks the experience in complex technologies and long-term investments to take them on.
"Melrose is trying to buy GKN on the cheap," Stevens, 69, said in a statement, "just at the point when our company is beginning to reap the benefits of its long-term investments."
Indeed, GKN revealed last month that its eDrive division is growing faster than management anticipated.
Sales have exceeded original projections set in 2017, when GKN secured three new contracts. The venture delivered about $46 million in 2017 revenue, but by year end, GKN had booked $2.77 billion in future eDrive business.