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...Request free trial
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 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 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
.
“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 now urgently strengthen takeover
rules and stop hedge funds influencing takeover bids through the
use of derivatives at the expense of national and long-term
interests.”
