Bankers, financiers, lawyers and public relations executives stand to rake in millions as part of a massive payday totalling around £140m if Melrose succeeds in its ‘debt fuelled’ bid for the aerospace and automotive engineering firm GKN, Unite revealed today (February 7).
The ‘eye watering’ sum in fees and expenses is the equivalent to winning tonight’s national lottery 12 times over, or 83 times the average total lifetime wage of a GKN worker.
Detailed in Melrose’s own bid document, the figures for fees and expenses follow earlier revelations that the four top executives of Melrose stand to make a reported £285m between them in ‘incentives’ if they boost GKN’s share price following a successful takeover.
In echoes of the ‘cowboy capitalist’ takeovers of the 1980s, the potential total amount to be pocketed by Melrose executives and their advisors from a successful takeover could be upwards of £425m, or the equivalent of six Airbus A320 airliners whose wings GKN work on.
The figures come ahead of today’s (February 7) meeting with the business secretary Greg Clark, where Unite workplace representatives from GKN will urge the secretary of state to block Melrose’s bid in the public interest, warning that the deal could damage the government’s industrial strategy and national defence interests.
Bid fees and expenses as detailed by Melrose include between £6m and £69m on financing arrangements; up to £50.5m on financial and corporate broking advice; and between £1m and £5m on public relations advice if the bid succeeds.
A further £9m will be spent on legal advice; £2m on accounting advice; and £1m on professional services, plus £3m on costs and expenses.
“The astronomical sums of money that could be pocketed by bankers, financiers and Melrose bosses from the ‘debt fuelled’ takeover of GKN would have the Gordon Gekkos of the 1980s licking their lips,” said Unite assistant general secretary Steve Turner.
“This is a bid that puts a ‘jackpot’ payday for a small number of people ahead of the long-term stability of a world a class engineering firm and the thousands of workers who make it a success,” he added.
“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 Tony Burke added that because GKN is “at the cutting edge of electric vehicle technology and aerospace engineering”, it is a vital component in “making the UK government’s industrial strategy a success and integral to UK defence interests.
“The short term desire of a few to rake in millions through this takeover puts all this at risk,” he argued. “There is a real danger if the takeover succeeds that long term investment will dry up, leading to cuts in research and development and the UK’s defence capability being harmed.
“The business secretary Greg Clark must use the power he has to act in the national interest and intervene to block this bid, as well as strengthening takeover laws to ensure public and social interests are put first.
“Unite is clear, we will not allow two sets of management to compete for the affections of shareholders by promising faster and deeper cuts. For Unite defending jobs always comes first.”