RichardK
25th July 2007, 10:55 PM
From the Birmingham Post
Indian giants make Ford shortlistJul 25 2007
By John Revill, Manufacturing Editor
Indian automotive giants Tata Motors and Mahindra & Mahindra have made it to the shortlist of bidders for Jaguar and Land Rover.
Reports on the sub continent had John Gardiner, official spokesman for Ford's Premier Automotive Group, which includes the Jaguar and Land Rover brands, as saying: "We have established contact with interested parties and are evaluating the expression of interest.
"But these are very preliminary discussions and we will not be publicly announcing any of the names in the fray."
Mr Gardiner refused to comment on whether Ford has worked out a shortlist and if there will be a starting price for the bidders, the reports said.
Sources have said officials from Ford have been in touch with both the Indian companies, who will now begin the actual process of hiring advisors, starting due diligence and organising factory visits.
Tata Motors and Mahindra & Mahindra both refused to comment when contacted.
Some reports have said Mahindra & Mahindra may partner with private equity players for the bid, while the Tata group may link either with private equity players or with Italian ally Fiat.
Fiat, on its own, reportedly turned down Ford's offer for the two brands, though it was interested in Land Rover and its American distribution footprint. Apart from the Indian auto companies, private equity players Cerberus Capital Management, Ripplewood Holdings and One Equity Partners are the other likely bidders for the two brands.
Prof Garel Rhys, of the Centre for Automotive Industry Research at the University of Cardiff, said Tata was one of the few automotive companies with the firepower to outbid the cash rich private equity companies.
Although he thought the private equity firms were still in the driving seat, Tata in particular was a credible bidder.
He said: "Tata could be one possibility, they are very ambitious and cannot be kicked out of court.
"They have a huge consultancy in London and they know what they are doing.
"India is a strong trading partner with the US and a purchase would not be vetoed.
"It is an incredibly efficient operation, much more profitable than Ford. They are the leading heavy truck builder in Asia and one of the biggest in the world."
If Tata was successful, it would have feelings of stewardship for old British assets, Prof Rhys said.
"If they were successful, Tata could not believe they are the owners of something like Jaguar and Land Rover.
"Tata is also very cash rich; it could give private equity companies a run for their money."
An industry source said he believed Tata was now firm favourite for Jaguar and Land Rover.
He suggested that Ford would want the least disruption on all fronts, and that tended to go against private equity.
Private equity would be looking for quick returns, cutting jobs and perhaps a factory, causing all sorts of aggravation with the unions.
Ford would want to avoid such an outcome, particularly as it would still be looking to sell engines to whoever took over.
In contrast, pointed out the source, the Tata acquisition of steel group Corus had gone relatively smoothly.
And, with Tata's size, it would be well able to take Jaguar and Land Rover forward.
Consequently Ford would most likely see Tata as a safe pair of hands for the two companies, which would allow the group an untroubled exit.
"The unions would be comfortable with a Tata takeover," said the source.
Indian giants make Ford shortlistJul 25 2007
By John Revill, Manufacturing Editor
Indian automotive giants Tata Motors and Mahindra & Mahindra have made it to the shortlist of bidders for Jaguar and Land Rover.
Reports on the sub continent had John Gardiner, official spokesman for Ford's Premier Automotive Group, which includes the Jaguar and Land Rover brands, as saying: "We have established contact with interested parties and are evaluating the expression of interest.
"But these are very preliminary discussions and we will not be publicly announcing any of the names in the fray."
Mr Gardiner refused to comment on whether Ford has worked out a shortlist and if there will be a starting price for the bidders, the reports said.
Sources have said officials from Ford have been in touch with both the Indian companies, who will now begin the actual process of hiring advisors, starting due diligence and organising factory visits.
Tata Motors and Mahindra & Mahindra both refused to comment when contacted.
Some reports have said Mahindra & Mahindra may partner with private equity players for the bid, while the Tata group may link either with private equity players or with Italian ally Fiat.
Fiat, on its own, reportedly turned down Ford's offer for the two brands, though it was interested in Land Rover and its American distribution footprint. Apart from the Indian auto companies, private equity players Cerberus Capital Management, Ripplewood Holdings and One Equity Partners are the other likely bidders for the two brands.
Prof Garel Rhys, of the Centre for Automotive Industry Research at the University of Cardiff, said Tata was one of the few automotive companies with the firepower to outbid the cash rich private equity companies.
Although he thought the private equity firms were still in the driving seat, Tata in particular was a credible bidder.
He said: "Tata could be one possibility, they are very ambitious and cannot be kicked out of court.
"They have a huge consultancy in London and they know what they are doing.
"India is a strong trading partner with the US and a purchase would not be vetoed.
"It is an incredibly efficient operation, much more profitable than Ford. They are the leading heavy truck builder in Asia and one of the biggest in the world."
If Tata was successful, it would have feelings of stewardship for old British assets, Prof Rhys said.
"If they were successful, Tata could not believe they are the owners of something like Jaguar and Land Rover.
"Tata is also very cash rich; it could give private equity companies a run for their money."
An industry source said he believed Tata was now firm favourite for Jaguar and Land Rover.
He suggested that Ford would want the least disruption on all fronts, and that tended to go against private equity.
Private equity would be looking for quick returns, cutting jobs and perhaps a factory, causing all sorts of aggravation with the unions.
Ford would want to avoid such an outcome, particularly as it would still be looking to sell engines to whoever took over.
In contrast, pointed out the source, the Tata acquisition of steel group Corus had gone relatively smoothly.
And, with Tata's size, it would be well able to take Jaguar and Land Rover forward.
Consequently Ford would most likely see Tata as a safe pair of hands for the two companies, which would allow the group an untroubled exit.
"The unions would be comfortable with a Tata takeover," said the source.