By Pamela Barbaglia
LONDON (Reuters) - Turnaround specialist Melrose (L:MRON) said on Wednesday it would not embark on a reorganisation of British engineering company GKN (L:GKN) if its hostile bid succeeds, part of an agreement with the UK takeover watchdog.
Melrose's 7.9 billion pound bid for GKN has become one of Britain's most tightly fought corporate battles for years and Melrose has had to engage with politicians who have expressed concern about any future break up of GKN and sale to foreign buyers.
The political criticism prompted Melrose boss Simon Peckham to make so-called post-offer undertakings - which are legally binding under Britain's takeover rules - on keeping GKN's British base and maintaining at least the levels of research and development investment made by GKN between 2014 and 2016.
Melrose said that throughout the five-year post-offer undertaking period it would keep the headquarters of the combined group in Britain and the business would continue trading on the London Stock Exchange's main market.
It also said Melrose would not seek to create a new holding company above Melrose unless the same post-offer undertakings were provided.
Melrose has been trying to win over shareholders and overcome a competing plan from GKN.
GKN shareholders have until 1200 GMT on March 29 to decide whether to take Melrose's cash-and-stock offer or stick with GKN's plan to sell off its automotive unit to U.S. group Dana (N:DAN) and focus on aerospace.
Melrose has also promised to keep the aerospace division of GKN for at least five years and increase spending on apprentices.
As another sign of commitment to Britain, Melrose said on Wednesday that no director would be appointed or reappointed, or even recommended, to the Melrose board if the majority of the Melrose directors would not be resident in Britain following such a move.
It said GKN's aerospace and automotive divisions will retain the same rights which they have as at March 26, 2018 to use the GKN trade marks.