Unite calls for tougher takeover laws as GKN bid gets government go-ahead
- Tuesday 24 April 2018
The whims of short-term speculators and hedge funds will ‘drive a coach and horses’ through the UK’s industrial strategy unless the government toughens up the UK’s takeover rules Britain’s largest union Unite warned today (Tuesday 24 April).
The warning comes as the business secretary Greg Clark gave the green light to Melrose’s takeover of the British engineering giant GKN which was heavily dependent on short-term speculators influencing the bid through derivatives.
Unite estimates that over 25 per cent of the GKN shareholder base could have been influenced by hedge funds with many holding an economic interest in GKN through derivatives rather than actual shares.
Unite is set to meet Melrose in the coming fortnight to press bosses on their plans for the company and secure guarantees over jobs and assurances that were given during the takeover on future investment, pensions and research and development.
Commenting Unite assistant general secretary for manufacturing Tony Burke said: “Time will tell whether the assurances given to the business secretary Greg Clark and the ministry of defence by Melrose are worth the paper they are written on. There are still major question marks over the future of the workforce and job security.
“Unite will be meeting with Melrose’s bosses pressing for further detail over its plans and seeking the job guarantees which are absent from the undertakings given to the business secretary Greg Clark.
“GKN was at the forefront of electric vehicle technology and is a major cornerstone to the government’s industrial strategy. Our fears remain that this could jeopardised with parts of the business sold-off piecemeal and jobs shipped off overseas.”
Unite assistant general secretary Steve Turner said: “The government needs to learn the lessons of the GKN takeover, which saw short-term speculators and hedge funds influence the outcome of Melrose’s bid without actually owning any shares.
“The whim of hedge funds looking to make a short-term quick buck through takeover trading is in danger of driving a coach and horses through the UK’s industrial strategy.
“Ministers need to ask themselves is it right that national defence interests and those of long term investors can be trumped by short-term speculators who do not even own shares in a takeover target?
“Following ministers’ refusal to properly act following the Cadbury takeover, the government must urgently strengthen takeover rules now and stop hedge funds influencing takeover bids through the use of derivatives at the expense of national and long-term interests.”
For further information please contact the Unite press office on 020 3371 2065 or Unite head of media and campaigns Alex Flynn on 020 3371 2066 or 07967 665869.
Notes to editors:
- Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.