Top Melrose bosses set to pocket millions when FTSE 100 engineering company sells its car business to the London Stock Exchange
Melrose’s top bosses are set to pocket millions when the FTSE 100 engineering company sells its car business to the London Stock Exchange next month, The Mail on Sunday can reveal.
The split will be the latest move by Melrose – which buys struggling industrial businesses, makes them more profitable and sells them – after buying engineering giant GKN for £8.1bn in a takeover fierce in 2018.
Melrose is to focus on GKN’s aerospace business after splitting off the automotive division, which will be known as Dowlais and listed separately.
It is expected to be one of the biggest IPOs on the London Stock Exchange this year, with a valuation of around £4 billion.
Melrose boss Simon Peckham will sit on the new company’s board and pocket shares worth £12million, while chief financial officer Geoffrey Martin is in line for shares worth of £8 million.
Winner: President of Dowlais Simon Mackenzie Smith with actress Eva Longoria
Dowlais chief executive Liam Butterworth – who has led GKN Automotive since 2018 – could be in line to earn £5.3million a year in salary and bonuses plus shares worth £400,000.
The great Simon Mackenzie Smith – appointed by Peckham last month to chair Dowlais – will receive a salary of £400,000 a year.
“It’s certainly a very lucrative salary for the top brass. Even the president is expected to walk away with nearly half a million,’ said Markets analyst Neil Wilson.
According to sources, Mackenzie Smith was recruited by Peckham for his negotiation expertise to help Dowlais find acquisitions. Previously, he had a 25-year career at Bank of America Merrill Lynch.
Educated at Radley State School, the Scottish aristocrat and four parents recently sold Finegand Estate near Balmoral for £5million. A loyal remainer, his Instagram account includes a photo of him defacing a ‘Vote Leave’ poster in Essex near his home in June 2016 with the word ‘Bigots’.
The social media account is also littered with posts from him at charity events with celebrities such as American actress Eva Longoria, who appeared on the Desperate Housewives series.
In City circles, he is best known as the banker who made millions in 2007 from Mike Ashley’s Sports Direct IPO.
Other notable deals struck by the blue bloods include selling Selfridges to billionaire Galen Weston for £628m in 2003 and floating Debenhams in 2006.
‘He’s smart, well-liked, well-connected and a bit crazy,’ a banking source told the Mail on Sunday.
Dowlais’ IPO is the latest twist in the saga since Melrose bought GKN in 2018 – the biggest hostile takeover since Kraft’s decision on Cadbury a decade earlier.
Since then, Melrose has restructured the business, including closing GKN’s automotive engineering plant in Birmingham with the loss of 500 jobs in 2021.
The Erdington site was renowned for manufacturing drivetrain systems for the automotive industry, with customers including Jaguar Land Rover.
The name Dowlais is a nod to the South Wales village that was home to the Industrial Revolution steelworks of the Guest family, one of the founders of the first Guest, Keen and Nettlefolds, later renamed GKN.
Mackenzie Smith made headlines ten years after the Sports Direct deal when court documents revealed he played a parody game with Ashley over who should pay the £750,000 float legal costs .
It was claimed in the documents that Ashley was ‘bored and frustrated’ with negotiations at a town meeting and eager to go to a London casino, 50 St James.
He is said to have walked out abruptly, with Mackenzie Smith in pursuit, questioning him about the charges.
Ashley came up with a parody game – where opponents try to guess how many coins players have hidden – to decide who should pay.
After Mackenzie Smith “reluctantly agreed”, Ashley lost and was forced to cough.