BMW rules out higher Rolls offer

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The Independent Online
BMW yesterday ruled out making an increased offer for Rolls-Royce Motor Cars as the cat-and-mouse game with Volkswagen for control of the luxury car maker continued.

Speaking at the group's annual shareholders meeting in Munich, Bernd Pischetsrieder, the chairman of BMW said: ""Under no circumstances will we change our offer for Rolls-Royce."

But he said that BMW, whose pounds 340m offer was topped by one of pounds 430m from VW last week, continued to believe that it would clinch the deal. In a speech to shareholders, Mr Pischetsrieder said: "We said at the end of last year that we would make only one offer and we have made only one. Therefore we are surprised by the public debate about whether we would make another."

Shareholders in Vickers, the parent company of Rolls, meet on 4 June to decide between the two bids. The company yesterday issued a circular to shareholders urging them to reject BMW's offer and accept the higher bid from VW.

Mr Pischetsrieder reiterated that BMW would end its contract to supply engines for the Rolls-Royce Silver Seraph and the Bentley Arnage if the business was sold to VW. The terms of the contract require it to give 12 months notice.

However, the outcome of the bid battle between the two German carmakers may yet rest with the aero-engine maker Rolls Royce plc which owns the rights to the Rolls-Royce name and trademark.

It has made plain its backing for the bid from BMW, with which it already has an aero-engines joint venture. VW would probably have to pay a substantial licence fee and give Rolls-Royce plc extensive guarantees about how the name would be protected before the aero-engine maker would agree to the transfer of the marque to a foreign buyer.

Vickers was initially engaged in a furious war of words with Rolls-Royce PLC over what it saw as the aero-engine company's attempts to interfere in the sale process and undermine its ability to maximise returns for Vickers shareholders.

But last night the Vickers camp was endeavouring to take the heat out of the row.

"There is no point resurrecting the barney we have last week. Let's just wait for the shareholders to vote on 4 June and then everyone will know where they are," said a spokesman.

One of Vickers institutional shareholders said yesterday that Rolls-Royce plc was behaving "perfectly properly in seeking to defend the interests of its own shareholders".