United Kingdom aerostructures manufacturer GKN has rejected a takeover bid from turnaround specialist Melrose Industries and disclosed a plan to separate its aerospace and automotive activities as part of a two-year business-improvement plan.

Meanwhile shares in housebuilder Bovis, which is undergoing a turnaround after seeing off two failed takeover bids past year, rose by 3.9 percent after saying it was on track to deliver a significant increase in profit in 2018.

GKN says Melrose's "preliminary and unsolicited" offer to purchase the entire shareholding was "entirely opportunistic", and that the terms "fundamentally undervalue the company and its prospects".

At the same time, having undertaken an intensive analysis of the economic benefits and costs involved, GKN said it intends to separate its automotive and aerospace businesses, saying the move recognises "the strategic optionality for shareholders in having separate companies with distinct investment profiles and capital allocation policies".

Whether today's news will affect the Isle of Wight division is not yet known.

Melrose, by contrast, says the deal would deliver "significant operational and commercial benefits" and reverse "a history of existing GKN management not delivering on margin target".

GKN's shares jumped by more than a quarter to an all-time high of 420p on the news, above the initial 405p cash and share offer on the table from turnaround specialist Melrose.

Bovis said it expected a stronger year in 2018

It also set out her plans to separate GKN's aerospace and automotive divisions to improve profitability. The cash-and-share offer valued the blue-chip group at 405 pence per share.

Following the warning, its proposed chief executive Kevin Cummings was ousted from the business even before he took up the post and was replaced by non-executive director Anne Stevens on a temporary basis.

Melrose has until 9 February to either make a firm bid or walk away.

The BBC quoted Nicholas Hyett, an analyst at Hargreaves Lansdown, as commenting that the split had been "on the cards for years" because there was little crossover between the two businesses.

The union urged shareholders to hold firm, warning that the bid was not in the long-term interest of GKN and could result in the company's assets being stripped.

On the appointment of Stevens as new chief executive, the firm's chairman Mike Turner said she "has the track record to transform GKN", pointing to her "successful turnaround" of The Ford Motor Company's Mexico, Canada and South America businesses and senior roles at Carpenter Technology and Lockheed Martin. Today the FTSE 250 company is valued at nearly £4.4bn.