Shares in GKN spin-off Dowlais fail to ignite investor excitement
Shares in GKN spin-off Dowlais fail to excite investors as stock falls 20%
Dowlais, the newly formed company comprising GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen, fell 27.8p to 117.2p
Shares in GKN spin-off Dowlais failed to excite investors after the stock plummeted 20 percent following the Melrose split.
Dowlais, the newly formed standalone company comprising GKN Automotive, GKN Powder Metallurgy and GKN Hydrogen, fell 27.8p to 117.2p on its first day of trading in London.
With a starting price of 145 pence per share, Dowlais was valued at just over £2 billion. The companies were bought by Melrose in a controversial £8.1 billion deal in 2018, along with GKN Aerospace, which will remain under the wing of the FTSE 100 turnaround group.
The takeover was met with opposition from the government and a number of shareholders.
The number of employees has fallen by 6,300 in the three spin-off companies since 2018, while total asset values have also fallen by £700 million since 2020.
US private equity firm Capital Group Companies is Dowlais’ largest shareholder, with some 202 million shares and a stake of about 14.5 percent, while Blackrock has collected about 89.8 million shares or 6.4 percent.
Melrose retains a 3 percent stake in the divested company.