By Ben Martin
LONDON (Reuters) - The chief executive of U.S. firm Dana Incorporated (N:DAN) is in London meeting top GKN (L:GKN) shareholders in a drive to persuade the British engineer's investors to back a deal with Dana and reject a hostile bid by Melrose Industries (L:MRON).
GKN agreed a $6.1 billion deal to merge its automotive division with Dana, an Ohio-based maker of axles and driveshafts, on Friday in a transaction it hopes will help to fend off an unwanted takeover approach by Melrose, a UK-based industrial turnaround specialist.
Melrose responded to the Dana deal by raising its cash-and-shares bid for all of GKN on Monday, an offer that at the time valued the FTSE 100 engineer at 8.1 billion pounds ($11.3 billion) and which was declared "final", meaning it cannot be increased under Britain's takeover rules.
James Kamsickas, the Dana chief executive, is now in Britain to discuss the merits of the automotive deal with GKN's major shareholders, two sources familiar with the matter told Reuters.
The Dana CEO is expected to spend most of the week in Britain meeting GKN shareholders, one of the sources added.
The battle for the future of GKN, a mainstay of Britain's engineering sector, is reaching its final stages.
GKN shareholders have two options. They can choose Melrose's offer of 81 pence in cash for each GKN share plus 1.69 new Melrose shares, a deal that will hand them a 60 percent stake in the London-listed turnaround specialist.
Or they can back GKN's plan, which would see them take a 47.25 percent stake in New York-listed Dana.
GKN, led by new CEO Anne Stevens, has also pledged to sell off its powder metallurgy business, which along with the Dana deal would leave the engineering group focused on the aerospace sector, supplying parts for aircraft including the Eurofighter Typhoon. ($1 = 0.7181 pounds)