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UK talking to Ford on brands sale

From Reuters| June 14,2007

The British government is in contact with Ford over the possible sale of the U.S. carmaker's Jaguar and Land Rover brands.

"We are in touch with the company. We still believe both Land Rover and Jaguar are highly successful companies and will have a highly successful future," a spokesman for Prime Minister Tony Blair said Tuesday.

Sources familiar with the matter said on Monday that Ford had hired investment banks to explore options including the sale of the two luxury British brands.

"The government talks to companies about the possible impact on jobs," the spokesman added.

Investment banks including Goldman Sachs, HSBC and Morgan Stanley are helping Ford to explore the sale of the two brands, the sources said Monday.

Ford, Goldman, HSBC and Morgan Stanley all declined to comment on the situation.

The review of options follows the sales of several car businesses to private equity as carmakers reshuffle their portfolios as they come under financial pressure and reorganize operations.

Cerberus last month agreed to buy Chrysler from Germany's Daimler, and a group fronted by former Formula 1 executive David Richards bought Aston Martin from Ford in March.

A report in London's City AM newspaper on Monday said Alchemy was preparing a £3 billion ($5.9 billion) bid for Ford's luxury UK brands and quoted Alchemy managing partner Jon Moulton as saying he was very interested in a bid.

An Alchemy spokeswoman said on behalf of Moulton, however, that the firm had not held any talks, "is not working on it" and is interested in them "only at an emotional level."

As well as Alchemy, French carmaker Renault denied it was a possible bidder for Jaguar and Land Rover, after City AM named it among possible bidders for the units.

When asked by reporters on Monday whether talks on Fiat buying Ford's Jaguar and Land Rover units were taking place, Fiat Chairman Luca Cordero di Montezemolo said "No."

Asked whether Jaguar and Land Rover "could be taken home," he said: "For now, we are bringing home the new 500 and lots of new Alfa and Lancia models."

Any sale of Ford's European luxury brands is unlikely to include Volvo, after Ford said last week it is not in discussions aimed at the sale of the Swedish unit.

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