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Friday, June 5, 1998 Published at 12:09 GMT 13:09 UK


Business

BMW out, VW set to get Rolls-Royce

Up for sale: the fate of Britain's famous luxury car maker is set to be decided

The future of Britain's most prestigious motoring company, Rolls-Royce, is currently being decided during a meeting of shareholders of Vickers, the parent company of Rolls-Royce motors.


BBC's Rory Cellan-Jones: "Volkswagen seems certain to win the day."
The German car maker Volkswagen is strongly tipped to win the battle with its £430m offer for the Vickers-owned firm.

The shareholders have already rejected a rival bid by the Bavarian car company BMW, which had offered to pay £340m.

A question-mark hangs over a wildcard entry from a group of Rolls fans calling themselves Crewe Motors, after the town in which the cars are made.

Five minutes before the shareholders meeting opened the group managed to secure enough pledges to finance its bid, and a vote on the future of Rolls-Royce was delayed while the Vickers board was considering the Crewe Motors offer.

However, minutes before the vote started, the Vickers board formally rejected the Rolls fans's bid.

A long and winding road

The battle for ownership of Rolls-Royce has taken many twists and turns, with Vickers initially backing the bid from BMW, which already makes engines for the company.


[ image: Volkswagen is the hot favourite]
Volkswagen is the hot favourite
But Vickers switched allegiance when Volkswagen waded in with a higher offer.

VW's hand was strengthened on Thursday with news that its Audi subsidiary had agreed to buy Vickers' Cosworth engines unit for £120m. The deal is conditional on the Rolls sale being sealed.

"This is excellent news for all concerned and underlines the case for our shareholders approving the sale of Rolls-Royce Motor Cars to Volkswagen," said Vickers chairman Sir Colin Chandler.

But VW Chief Executive Ferdinand Piech refused to see the sale as a done deal.


[ image: BMW: out of the race]
BMW: out of the race
He told VW's annual shareholders' meeting: "In the event that we don't win the bid, we will realise an entry into the top luxury segment by other means. In this case our goal would be to go it alone."


Gavin Green, Editor in Chief of Car magazine: "Rolls-Royce has dropped a bit in technical excellence"
But with 95% of Vickers shares held by institutional investors who are almost certain to follow the board's advice, pundits feel sure Volkswagen will win comfortably.




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