BANKERS stand to rake in millions of pounds from the “hostile” takeover of engineering firm GKN, the Unite union said today.
The “eye-watering” sum of £140 million will be shared by bankers, lawyers and public relations executives if Melrose succeeds in its takeover bid, research by Unite found.
The sum includes up to £69m for financing arrangements, up to £50m for financial advice, £9m for legal advice and millions more for PR and professional services.
Unite, which is opposed to any takeover, said the total amount is more than 80 times the average total lifetime wage of a GKN worker.
The figures are detailed in Melrose's bid document, the union said, and would be on top of any “incentives” given to company executives following a successful takeover.
Union officials met Business Secretary Greg Clark today to press him to block the bid.
Unite assistant general secretary Steve Turner said: “This is a bid that puts a ‘jackpot’ payday for a small number of people ahead of the long-term stability of a world-class engineering firm and the thousands of workers who make it a success.
“The government needs to stop this takeover and prevent the wealth of the firm being stripped and funnelled into the pockets of wheeler-dealers at the expense of GKN workers’ livelihoods.”
Unite assistant general secretary for manufacturing Tony Burke also warned that long-term investment could dry up if the takeover succeeded, leading to cuts in research and development.
Labour said it was “deeply worrying” that corporate elites could make such huge sums from the takeover of one of Britain's biggest engineering and manufacturing businesses.
Shadow business secretary Rebecca Long Bailey said: “This takeover bid could risk weakening Britain’s industrial base and diminishing our national defence capabilities, as well as potentially threatening thousands of jobs.
“The government should intervene and take a closer look at Melrose’s bid. They cannot sit back and allow for such takeovers to go ahead without appropriate oversight and investigation.”
Raising the issue at Prime Minister’s questions, Labour’s work and pensions spokesman Jack Dromey said that GKN was “facing a hostile takeover” and asked whether the government would block the bid, as it has the power to do so.
Prime Minister Theresa May replied that the Department for Business was looking into this.
“The government will always act in the national interest,” she asserted.
Melrose executive vice-chairman David Roper claimed the concerns were “unfounded.”
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