Ford Motor Co. (NYSE:F) could name Indian automaker
Tata Motors Ltd. a ``preferred bidder'' for its Jaguar and Land
Rover units as early as Friday, two people briefed on the
negotiations said Wednesday.
Talks continue at present with all three potential suitors, and a
final deal is not expected to be announced until early next year,
one of the people said.
Tata is vying with another Indian automaker, Mahindra & Mahindra
Ltd., as well as U.S. private equity firm One Equity Partners LLC,
for the units. Earlier this month the three companies had submitted
bids that ranged from $1.5 billion to US$2 billion, said one of the
Both people briefed on the negotiations requested anonymity
because the talks are confidential.
``They have been negotiating with all three parties,'' one of the
people said of Ford. ``Clearly it isngt a signed, sealed and
delivered thing yet to Tata Motors.''
Ford executives continually hawe said they do not expect a sale
to be announced until early in 2008, but a preferred bidder would
mean the company is focusing negotiations on one suitor.
Tom Hoyt, a spokesman for Dearborn, Mich.-based Ford, would not
comment Wednesday on any potential announcement.
``There's a lot of speculation, and we're just not commenting on
the speculation,'' Hoyt said.
Jaguar's main labour union, Unite, said it also is expecting the
preferred bidder announcement soon, said spokesman Eddie Barrett.
Unite has said it would prefer Tata if the company is sold.
Unions in the United Kingdom are seeking assurances that the sale
would not affect employment levels. Combined, Jaguar and Land Rover
employ about 15,300 in the U.K.
Ford is interested in maintaining its parts supply relationship
with the new owners of Jaguar and Land Rover. The company builds
engines for Jaguar in Europe.
All three bidders met in November with the British government,
labour unions and Ford about the sale.
Cash-hungry Ford, which lost $12.6 billion last year but earned
$88 million in the first nine months of 2007, has been looking to
sell Jaguar and Land Rover.
It has mortgaged its assets to borrow money to stay operating and
expects to burn up $12 billion to $14 billion until 2009, when it
plans to return to sustained profitability.
Jaguar and Land Rover have been hit by unfavorable exchange rates
and high production costs in Britain.
Jacques Nasser, Ford's chief executive from 1999 to 2001, is
involved with the bid from One Equity Partners, an affiliate of
JPMorgan Chase & Co.
Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for
$2.7 billion in 2000, joining them with Aston Martin and Volvo to
form its Premier Automotive Group. Ford has not said how much it
wants for the combined units.
Earlier this year Ford completed the sale of its controlling
stake in Aston Martin for $931 million in cash and preferred stock.
Ford has said it plans to keep Volvo for now, fixing its cost
structure and making it a more premium brand.