Unite reveals bankers, lawyers and financiers to pocket massive £140m in GKN takeover
- Wednesday 7th February 2018
Bankers, financiers, lawyers and public relations executives stand to rake in millions as part of a massive payday totalling around £140 million if Melrose succeeds in its ‘debt fuelled’ bid for the aerospace and automotive engineering firm GKN, Britain’s largest union, Unite revealed today (Wednesday 7 February).
The ‘eye watering’ sum in fees and expenses is the equivalent to winning tonight’s (Wednesday 7 February) national lottery 12 times over, or 83 times the average total lifetime wage of a GKN worker (see notes).
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 £285 million 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 £425 million, or the equivalent of six Airbus A320 airliners whose wings GKN work on.
The figures come ahead of today’s (7 February) 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.
A full breakdown of the bid fees and expenses as detailed by Melrose in its bid document are as follows:
- Financing arrangements – between £6 million and £69 million depending on whether the bid succeeds
- Financial and corporate broking advice – up to £50.5 million depending on whether the bid succeeds
- Legal advice – estimated at £9 million
- Accounting advice - £2 million
- Public relations advice – between £1 million and £5 million depending on whether the bid succeeds
- Other professional services - £1 million
- Other costs and expenses - £3 million
Commenting Unite assistant general secretary for aerospace Steve Turner said: “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.
“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.
“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 added: “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. 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.”
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.
- Tonight’s national lottery is an estimated £11.3 million
- Unite estimates that the average wage across GKN’s UK workforce is £30,000 and calculates a working life as being 40 years giving a figure of £1.2 million as a total lifetime wage.