Ford Motor Co. has apparently drawn a half-dozen offers for Jaguar and Land Rover, after its advisors solicited a second round of bids for the fabled British nameplates, reports indicate.
Tata Motors Ltd., India's largest carmaker, is one of the leading bidders on the list, which also includes several private equity groups, including Ripplewood Holdings LLC, TPG Inc., One Equity Partners, and Terra Firma Capital Partners, according to reports press reports emerging from London. Jac Nasser, former Ford chief executive, is one of the advisers in the One Equity Partners bid.
However, Cerberus, which now has its hands full with Chrysler and GMAC, apparently has elected to drop out of the bidding.
Tata could easily emerge as the front-runner because the recent turmoil in the credit markets has made it more difficult for private equity firms to assemble financing packages.
Ford announced last spring it planned to sell the British brands and was also considering the sale of Volvo in an effort to concentrate on reviving its floundering English brands. It sold luxury sportscar maker Aston Martin, also part of PAG, earlier this year for $931 million.
The sale of Land Rover and Jaguar could bring Ford $8.2 billion based on last year's sales figures, but that doesn't take liabilities into account. Both brands, but particularly Jaguar, have contributed little to Ford's bottom line over the years. Jaguar, in particular, is often referred to by the company's finance staff as the "English Patient."
Meanwhile, Ford needs the cash that could be generated by a sale to help finance the new voluntary employee benefit association, or VEBA, which is a key part of the company's new contract with the United Auto Workers.
Negotiators from the Ford and United Auto Workers wrestled with financing the VEBA as talks between the company and the union moved toward a climax last, knowledgeable sources said. The union and Ford struck a new agreement in the wee hours of Saturday morning.
The VEBA, which the union maintains will protect the post-retirement healthcare benefits of UAW retirees, was critical to the settlements at both GM and Chrysler, Gettelfinger has said.
However, Ford lost more than $12.6 billion last year and there is some doubt about whether it can afford the roughly $15 billion needed to finance the VEBA at a level comparable to those the union negotiated at Chrysler and GM.
The union labor agreement with Ford expired Sept. 14 and workers have been continued to work under the old agreement, which can be canceled by either side with 72 hours' notice.
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