BIDDERS for Jaguar and Land Rover, two of Britain’s best-known car companies, have been given until next week to submit indicative offers.
The July 19 deadline has been issued by Ford, the American car group that owns the two marques. Ford has yet to announce publicly that it will sell the Midlands-based companies, but has hired three banks HSBC, Goldman Sachs and Morgan Stanley to advise on its options.
Some analysts believe confirmation of the sale could come with its second-quarter figures, likely to be published the week after the deadline. The companies are expected to be sold as a single unit. Ford declined to comment yesterday.
Industry sources said Ford had so far been keen to keep a tight rein on the sale process, and had sent only limited information to a small number of private-equity groups.
They are thought to include Cerberus, the American buyout firm that has built up a portfolio of automotive assets, Ripple-wood Holdings, Blackstone, Providence, and One Equity, JP Morgan’s private-equity arm which employs as a senior partner Jac Nasser, a former chief executive at Ford.
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The sources said that, despite the deadline for indicative bids, a sale was still some way off.
“I think it might be more accurate to describe these indicative bids as sighting shots to inform the final decision on the timing of the sale. Bidders don’t really have enough information to come up with detailed proposals yet,” said one source.
A fortnight ago The Sunday Times revealed that Ford had hired KPMG to prepare detailed accounts for prospective bidders, with work needed to disentangle Ford’s input to the two groups from their underlying trading.
The political sensitivity of the sale was underlined last week when the Transport and General Workers’ Union adopted an emergency resolution on the matter during its biennial conference in Brighton.
The union said the sale could have an effect on 19,000 people directly employed by the companies, and thousands more at their suppliers.
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It issued a list of eight demands for any sale agreement, including the continuation of production at the companies’ three UK plants at Castle Bromwich, Halewood and Solihull for five years, a long-term commitment to the engineering and research centres at Gaydon and Whitley, and a 10-year contract for Ford’s UK plants to supply engines and castings.
The dominance of private-equity groups on the list of bidders will further disturb union leaders, who have led a campaign against buyout firms in recent months.
They will, however, be familiar with One Equity’s Nasser, who was instrumental in the revival of the Halewood site on Merseyside and its conversion from a Ford factory, which made the Escort, to a Jaguar plant that made the X-type, the smallest Jaguar model.
“The unions are a real issue for Ford,” said one car industry executive. “Not only do they have a highly unionised work-force at their remaining Ford plants in the UK, but the buyer of Jaguar and Land Rover businesses will be reliant on Ford engine plants for the continuation of its business.” Ford plants at Bridgend and Swansea, for example, make most of the engines used by Jaguar.
While Jaguar has been making large losses, Land Rover has staged a revival in recent years. Last week it said it had sold 109,422 vehicles in the first six months of the year, its best-ever total.