Ford Takes Final Bids for Jaguar and Land Rover
The Economic Times of Mumbai published an report yesterday saying that there are three final bidders left for the Jaguar/Land Rover package deal Ford is offering, and those three firms are Tata, One Equity Partners, and Mahindra and Mahindra, through its proxy, the buyout firm Apollo.
Last month the main Ford union workers (named Unite) announced that they backed the bid from Tata, and some banks and industry analysts believe that support might turn out to be important in Ford’s decision. However, many observers feel Tata has the advantage in the bidding process for more basic reasons – its knowledge of the British market, its successful deal history and its massive size.
But not everyone would be happy with Tata as the new owner of Jaguar and Land Rover. Jaguar dealers in the United States, Jaguar’s most important market, have told Automotive News, an industry news magazine, that they are uneasy about having either Tata or Mahindra owning Jaguar. Their belief is that it will affect customer perception of the Jaguar brand in a negative manner in the U.S. Their point of view is that Americans just do not associate India with luxury goods. Their preference for new ownership is One Equity Partners, the private equity firm whose bid is being led by Jac Nasser, the former CEO of Ford.
The Economic Times article said that, “each bid will include a set of caveats such as balance sheet health, management freedom and restructuring flexibility, and Ford will use a combination of bid value and “obligation to local communities and employees.”
It is expected that all the bids will be fairly close in value, with the offers clustered tightly in the $1.7 billion USD to $2.1 billion USD range. Ford will undoubtedly have a difficult decision to make if the bids are as close as everyone seems to believe. If Ford has a favorite, that preference has never been apparent at any point during the sale process, and as far I’m concerned, Mahindra could walk away with the prize and it wouldn’t be a surprise to me.
The Hindustan Times newspaper of India stated that the final modifications came in yesterday, and that there would be no further changes permitted after yesterday’s date.
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