BMW's efforts to shed its loss-making British subsidiary Rover took another twist Saturday when the German firm announced it would start talks with Phoenix consortium over a possible sale.
The decision came only a day after talks with the favored bidder, London-based Alchemy Partners, broke down -- and two days after BMW dismissed the bid from Phoenix, another British consortium.
"We are going to look closely at the offer made by John Towers' consortium," said Rover chairman Werner Saemann in a statement issued from BMW's German headquarters.
John Towers is a former boss of Rover. His Phoenix consortium is the only remaining bidder for the car firm after London venture capitalists Alchemy Partners abruptly pulled out of talks Friday.
Unlike Alchemy, which envisaged large-scale redundancies to transform Rover into a small-scale niche car-maker, Towers' plan is to keep the British firm in the mass-production market.
The sale of Rover to Phoenix was not only possible, but would be the only option that could keep the firm open, said Saemann, who is also a member of the BMW board.
Britain's Trade and Industry Secretary Stephen Byers gave a cautious welcome to the news in a statement issued Saturday.
"It's not the role of Government to run the commercial negotiations between the interested parties.
"Whilst recognizing that ultimately the final decision will be a commercial one to be taken by BMW, there is a role for the Government in bringing parties together and in leaving no stone unturned in trying to achieve a successful outcome for the workers at Longbridge and the people of the West Midlands.
"That is exactly what we shall be doing in the days ahead," he added.
Some analysts suspect that Alchemy, feeling itself in a strong negotiating position as the only remaining bidder for Rover, pushed for extra concessions from BMW in the final negotiations.
Union leaders in Britain say talks between Alchemy and BMW broke down over the redundancy payments the venture capitalists would have had to pay to the thousands of workers it laid off.
The unions opposed the Alchemy bid takeover because of the thousands of job losses it would have entailed. Union officials traveled to Munich last week to press BMW to give Phoenix more time to prepare their offer.
But on Thursday, BMW dismissed Phoenix, arguing that the consortium had so far failed to provide the financial guarantees to back its offer.
BMW was in a hurry, having given itself one month to decide the fate of the British unit, which it estimates has cost it 4.6 billion euros (4.2 billion dollars) in the six years since it acquired it in 1994.
The shock news of Alchemy's pull out initially brought BMW shares tumbling down 8.18 percent Friday.
They recovered to finish the day's trading down 1.99 percent at 29.6 euros, on a day when the Frankfurt market gained 2.67 percent overall.
Saturday's decision to reopen talks with Phoenix consortium after dismissing its viability only two days ago is an embarrassing U-turn for the German car makers.
But Towers' bid does have the backing of the unions -- and the British government has already made it clear that it favors a deal that saves as many jobs as possible.
The closure of the Rover plants in the West Midlands, in central England, would lead to the loss of thousands of jobs -- MUNICH (AFP).
© 2000 Al Bawaba (www.albawaba.com)
