It said this will be a final offer of 467p per share and would mean GKN shareholders would own 60 per cent of Melrose - up from 57 per cent, and receive £1.4bn in cash.
But on Monday Melrose said that it thought that tie-up was "hasty and ill-thought-through".
The deadline for GKN shareholders to accept its offer is March 29, it said, adding that it encouraged shareholders to accept its offer and help create a "UK-listed manufacturing powerhouse with very significant future potential".More news: Automakers respond to Trump's proposed steel, aluminum import tariff increases
"We have a clear plan; GKN does not", said Melrose chairman Christopher Miller, throwing shade at the engineer's strategic plan.
The increased bid follows the announcement on Friday that GKN had reached an agreement to combine its automotive Driveline business with New York-listed engineering firm Dana Inc in a USD6.1 billion cash-and-shares deal.
GKN said in a short statement that its board was now evaluating the revised offer, and that shareholders were advised "not to sign any document which Melrose or its advisers send to them".
"Shareholders are advised not to sign any document which Melrose or its advisers send to them", it said. GKN said that offer was "opportunistic" and "fundamentally undervalues" its prospects.More news: The Best 2018 TicketGuardian 500 Lineup — Fantasy NASCAR Picks
"The potential transaction with Dana, if it is allowed to go ahead in the last quarter of this year, would leave you with a minority stake in a foreign listed group run by a Dana management team based in OH", said Miller. Melrose further commented on the FTSE 100 group's agreed automotive tie-up with Dana, arguing that the transaction was "prejudicial to GKN's United Kingdom shareholders". "GKN directors will do the same in respect of their own beneficial shareholdings".
GKN was left vulnerable to bid approaches after two profit warnings in October and November that were caused by problems at its USA aerospace business and sent its share price tumbling.
"We are more convinced than ever that the Melrose team, who have decades of experience in successfully transforming businesses, are the only real choice of team to re-energise and re-focus GKN to unlock its full potential", Melrose said in its statement.More news: West Ham co-owner 'hit by coin' in crowd trouble
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