Source - SMW
Takeover target GKN said it plans to return up to £2.5bn to shareholders over the next three years, with a significant part expected to come from divestments executed within the first 12 to 18 months, including the sale of Powder Metallurgy. 

The engineering group is the subject of a hostile takeover £7bn takeover bid from Melrose industries.

The announcement comes as the company provided an update on its new strategy and transformation plan along with its cash improvement initiative, the latter is expected to deliver a recurring annual cash benefit of £340m from the end of 2020.

The company said its progressive dividend policy would aim to target an average payout of 50% of free cash flow over the period of 2018 to 2020.   Anne Stevens, Chief Executive of GKN plc, said: 'The new strategy brings clarity, accountability and focus to GKN's world class businesses and will allow the Group to attain world class financial performance.'   'This strategy is expected to generate significant cash for shareholders in the short term and meaningful sustainable cash flows over the mid to long term.  We expect to deliver £340m of recurring annual cash benefit from the end of 2020 and are targeting a return of up to £2.bn to our shareholders over the next three years, with a significant part expected to come from divestments executed within the first 12 to 18 months.  We have a plan and we are dedicated to delivering it.' 
 
At 8:23am: (LON:GKN) GKN PLC share price was +6.15p at 404.15p



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