The takeover specialist has raised its cash-and-share offer for the United Kingdom engineer by just over a tenth to 7.9 bln pounds. Under the proposal, GKN shareholders would own 60 per cent of Melrose, and receive £1.4bn in cash.
GKN has rejected Melrose's revised and final takeover bid.
GKN Chairman Mike Turner said: "The board believes that Melrose's revised offer continues to fundamentally undervalue GKN and has no hesitation in unanimously rejecting it".
But Aviva's Cumming described GKN's plan as a "reactive review of its business structure" and said Aviva Investors favored Melrose's "proposed measured execution of value".
The increased bid followed the announcement on Friday that GKN had reached an agreement to combine its automotive Driveline business with New York-listed engineering firm Dana in a USD6.1 billion cash-and-shares deal.
On Friday, GKN chairman Mike Turner said the combination of GKN Driveline and Dana would create "a United States and UK led global market leader in vehicle drive system".
Over the weekend, GKN-which has two main divisions serving the aviation and automotive sectors-reached an agreement, subject to shareholder approval, to merge the latter with a USA counterpart, Dana in a $6 billion cash and shares deal.
However, in his letter, Melrose's Christopher Miller said if the Dana transaction proceeded, it would leave GKN shareholders "with a minority stake in a foreign listed group run by a Dana management team based in Ohio". It has offered to give back £2.5bn to shareholders and agreed to merge its auto unit with U.S. company Dana.
Melrose's previous offer was worth about 420p, below GKN's share price of 435.1p on Friday.
The deadline for GKN shareholders to accept Melrose's offer is March 29.
"GKN is one of the most prominent engineering firms in the United Kingdom, the third biggest in our country".