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Wednesday, November 12, 1997 Published at 08:03 GMT


Mayflower abandons Vickers bid after BMW's warning

The Mayflower Corporation has abandoned its bid to buy the Vickers group, including the most famous of its subsidiaries, Rolls Royce Motors.

The decision follows an announcement by the German car manufacturer BMW that it would stop supplying engines for new models of Rolls Royce and Bentley cars if Mayflower bought Vickers.

BMW also confirmed its interest in buying Rolls Royce, which was recently put up for sale by Vickers. A statement from BMW's headquarters in Germany claimed it would be the best buyer for the world famous luxury car maker.

Vickers, had opposed the hostile takeover bid by Mayflower, a little known car body maker half its size.

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If Mayflower had been successful it had been expected to dispose of Vickers' defence operations, which include making Challenger tanks.

Vickers recently signed a £100 million contract to supply another 20 Challenger II main battle tanks to the Sultan of Oman. The order from Oman's defence ministry is for the tanks plus spares and training.

The tanks are manufactured in Leeds and Newcastle and the deal secured thousands of jobs at the two factories.

However, shares in Vickers, also the owner of Cosworth engines, jumped 29 pence to 255p, on the strength of Mayflower's interest in the group.

BMW had been widely tipped to buy Rolls Royce before the Mayflower rumours surfaced. The company already owns the British car manufacturer Rover

However, the sale of Rolls-Royce would mean that one of the most powerful symbols of Britain's industrial heritage would cease to be British-owned.

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