BBC News Online: Business

VW back in race for Rolls-Royce

Graham Morris's comments followed a report in a German tabloid that Volkswagen had upped its offer after the apparent success of the £340m BMW bid.

Mr Morris said: "BMW has an agreement in principle that lasts for a month. Obviously, it does not preclude anyone else from making offers.

"Vickers have to consider the best situation for their shareholders. But they can't stop people from making bids."

A customer consortium has also insisted BMW does not yet have the deal sown up. It says shareholders, who must ratify the sale, will never agree to a buy-out that dilutes the essentially British character of the luxury car-maker.

But the real competition in the view of most analysts remains firmly between the two German bidders.

The German newspaper Bild on Wednesday said VW had increased its original offer of 1.5bn marks (£500m) by 200m marks (£65m).

In addition, Bild said, VW put in an offer for Cosworth, an engine-manufacturer also owned by Vickers.

BMW, whose bid was provisionally accepted on Monday, promised to invest £1bn, double the workforce and keep production in Britain.

Mr Morris said: "We have a contract with BMW under certain circumstances and we would expect that they would stick to that."

The Chairman of BMW threatened to stop supplying parts to Rolls-Royce if it lost the deal.

Bernd Pischetsrieder also played down the possibility of shareholders rejecting his company's bid.

"Historically, there have hardly been any occasions where shareholders took a decision different from the board," he said.

But, to reassure the doubters, he added: "Rolls-Royce must stay as absolutely British as possible."

Relevant Stories

BMW pledges £1bn Rolls-Royce investment (01 Apr 98 | Business)
VW in bid for Rolls-Royce (25 Mar 98 | World)

Internet Links

Vickers
BMW
VW.com
Rolls-Royce and Bentley Motor Cars
Rolls-Royce Enthusiasts' Club
Bild online

The BBC is not responsible for the content of external internet sites.

In this section

Ofgas slams British Gas advert
Sony warns of impending world recession
Germany clears the way for EMU
Cable & Wireless to axe 1,500 jobs
Royal & SunAlliance rises over China
Shares plunge on gloomy economic survey
Blair opens radical show of British innovation (From Special Report)
Wembley Stadium sold to highest bidder (From Sport)
Slump in shop sales sparks rates hope
Swiss clean up banking (From Despatches)
Whither welfare?

Business Contents

• Commodities
• UK Business Summary
• Exchange Rates
• UK Shares
• Interest Rates
• The Markets
• UK Results