Engineering and manufacturing giant GKN has laid bare to investors the prospect of it having to top up its pension fund if turnaround outfit Melrose is successful in its £7.4 billion takeover bid.
The embattled firm has stressed that Melrose's offer would saddle the business with a higher debt burden which may have "implications" for the amount of money needed for the pension scheme.
Melrose tabled a bid for the Redditch-based group this month, was flatly rejected by GKN which specialises in the aerospace and automotive sectors, making parts for companies such as Porsche, Volvo, Airbus and Jaguar Land Rover.
Pension trustees can demand more money is paid towards a company's retirement scheme if they decide the risk posed to future funding has increased.
Updating the stock market on the pension scheme, GKN said the group's net leverage would be "materially higher" if Melrose's takeover bid went through.
It added: "This may have implications for the covenant strength of the company, the level of the technical provisions deficit and therefore the level of immediate and/or long-term cash funding requirements."
This latest twist in the takeover tussle follows a weekend report from the Daily Telegraph, saying the Government had ordered senior officials to assess whether the takeover was in the public interest.
GKN has previously said it was planning to separate its group so the automotive and aerospace sectors functioned separately.
New chief executive Anne Stevens stepped into the role in November when Kevin Cummings, who was due to replace the retiring incumbent Nigel Stein, suddenly left the company.
At the time, the group was preparing for a further write off of up to £130 million in the aerospace division which Mr Cummings used to lead.
A spokesman for Melrose said: "This is presumably a clarification on the back of reported analyst briefings on the subject by GKN last week.
"At the time of the trustee statement we said: 'The numbers published by the GKN trustees are entirely in line with our own reading of the pension exposure at GKN. Melrose has an impeccable track record of safeguarding and improving pensioners rights in every acquisition we have made'.
"This statement from GKN has no impact on our calculations and contains nothing that should concern GKN pensioners."