The last three bidders in the race to buy Land Rover and Jaguar submitted revised offers for the marques last night.
Tata, the Indian conglomerate, OneEquity, a group led by Jacques Nasser, the former Ford chief executive, and Mahindra & Mahindra, which produces lorries and trucks in India, were asked to submit fresh bids after being given access to more data and after a series of meetings with the unions and politicians.
It is expected that Ford, the parent of Jaguar and Land Rover, which is selling the businesses, will select a preferred bidder within two weeks, before negotiations with pension trustees, sources said. It is not expected to make its choice public until it has signed a memorandum of understanding. A source close to one of the bidders said that Ford wanted the bids to include more details of financing arrangements, given the concerns over the deepening credit crunch. He said: “They don’t just want to see the letters of interest ? they want to see the commitment letters.”
The source cautioned that it would be difficult to submit a full offer at this stage, before negotiations with the pension trustees. Last year the two brands had a pension deficit of about £200 million, and pensions are not thought to be a significant issue for the bidders or for the unions. The source added: “It’s not a deal-breaker, but it’s an important point.”
The revised proposals come after James Brierley, managing director of Stratstone, the Jaguar dealership, and chairman of the British Jaguar dealers’ council, gave a green light yesterday to any of the last three bids, brushing aside objections to the Indian bids that have been raised in the United States. Last week Ken Gorin, the president of US Jaguar dealers, said that a successful bid by either Tata or Mahindra & Mahindra may present image difficulties and that the American dealers favoured the bid by OneEquity, the US private equity company.
However, Mr Brierley said: “Ken’s view was a little bit narrow. After speaking to most of my members, we are very happy with any of the three companies. We wanted assurances over the future and product plans and they all have given that.”
Mr Brierley’s comments will reassure Ford after reports that some members of the Jaguar/Land Rover management had reservations about the Indian bids because of the market position of their vehicles. Tata is about to launch a car in India that will be priced at slightly more than £1,000.
The UK dealers have held a series of meetings with all of the bidders, as have the unions that have backed Tata, because they believe that it offers the best long-term future. Their move overturned the private objections of some national union leaders who had been concerned about Tata’s market positioning.
Ford has involved all stakeholders in talks about selling the two brands because of the political sensitivity of the sales. Together, the marques directly employ 16,000 and it is thought that they could support a total of 40,000 jobs, including ones in the supply chain and the local economy.
