Short-term investors could tip the balance in Melrose’s bid for GKN
Melrose could seal a takeover deal for GKN by the end of the week, as short-term hedge funds tip the balance.
Merger-arbitrage traders now hold the key to the outcome of Melrose's hostile bid, as investors gear up to vote by Thursday.
The short-term funds, which strategically buy up shares in takeover targets, now own a quarter of the FTSE 100 company, the Sunday Times reported.
Meanwhile activist investor Elliott threw its weight behind the proposed takeover on Friday, urging fellow GKN shareholders to accept the bid.
The battle for the firm has sparked debates over the UK's current takeover rules, and attracted a call from a cohort of MPs for the government to block the takeover.
But Melrose has closed in on its target in recent weeks, agreeing to pump £1bn into GKN's pension scheme and dropping its condition that the bid would be dependent on US national security clearance.
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