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Tata on top; but Ford wants other suitors
December 21, 2007 12:46 IST
Not wanting to alienate other suitors, including Mahindras, Ford may wait till the new year to announce the winner for its Jaguar and Land Rover brands, although Indian conglomerate Tatas have emerged as the top choice, media reports said in London on Friday.
"Tata Motors [Get Quote] is set to be chosen by Ford as the preferred bidder for Jaguar and Land Rover as early as Friday," a report in Financial Times said quoting people close to the situation.
"For all intents and purposes, Tata is the preferred bidder," the report quoted a person close to one of the rival bidders, who added that Ford might select a preferred bidder without making an official announcement to avoid alienating other suitors, whom it needed to keep on side in case talks with the favoured candidate fell through.
"No decision has been made at this time... We anticipate an agreement early next year at the latest," a Ford spokesperson told PTI.
"These are complex commercial discussions and it is in the interests of all parties concerned if the process is conducted in a confidential manner," the official added.
The Financial Times report said that Tata Motors had pulled ahead of two rival bidders -- another Indian carmaker Mahindra and Mahindra and One Equity, a private equity firm led by former Ford CEO Jacques Nasser.
"Ford is likely to make an official announcement after the new year," Financial Times said, adding offers were in the range of $1.8-2.2 billion.
It added that Tatas would be given an exclusivity period to finalise the detailed agreements and a final deal was expected to be signed early in 2008.
"Ford is expected to take the successful preferred bidder before the Jaguar and Land Rover pension trustees for further negotiations. They would then begin the complicated negotiations required to reach a final arrangement," Financial Times report said.
The successful bidder would be asked to sign about 40 contracts as part of the deal, including those for engine production and information technology systems, it added.
Ford to announce Jaguar-Land Rover sale to Tata tomorrow
"There could be several more sticking points that could undo a deal, such as the cost of complying with stricter emissions regulations in Europe and whether the successful bidder would be permitted to use intellectual property belonging to Jaguar and Land Rover in other parts of the group," the report noted.
On Thursday, a report in Birmingham Post had quoted unnamed Land Rover sources as saying that Tatas are set to be named on Friday the top choice.
The sources had told the paper, "It is definitely Tata. There is one final meeting and so long as there is no last minute hitches, which are not expected, then an announcement will be made on Friday," adding the final details would be worked out in the next six weeks, it added.
The report had also quoted a union official as saying that Mahindra's bid fell flat because of links to a private equity firm as the Indian firm was working with Apollo.
Birminghan Post had said Tata officials are coming from India to the UK for the announcement and the deal has been supported by the staff as well as the government.
Noting that unions had approved the decision, the report quoted a union official as saying: "We cautiously welcome this development, although the devil will be in the detail."