LONDON (Reuters) - Dana Inc, the U.S. company seeking to merge with the auto unit of British engineering company GKN, said it would seek a secondary listing in London, a move which would allow more British shareholders to back the deal.

GKN is the subject of a hostile takeover bid from Melrose which it is trying to fight off an alternative plan to merge its auto unit with Dana, leaving it focused on its aerospace business.

Dana said in a statement on Monday that some GKN shareholders had said they wanted to hold stock in the new enlarged company and it would list in London in order to enable them to do so, getting around rules that prevent some UK funds holding U.S. stock.

(Reporting by Sarah Young; editing by Kate Holton)

Stocks treated in this article : Dana Inc, GKN, Melrose Industries