Rolls owners keen to join BMW bid

The head of BMW disclosed yesterday that he had been approached by a dozen wealthy Rolls-Royce owners keen to join the German group if it bids to buy the luxury car maker from Vickers. Michael Harrison examines the latest manoeuvrings.

Bernd Pischetsrieder, chairman of the German car maker, said it would make sense to bring Rolls and Bentley into its stable of models alongside Rover. He said that if BMW did succeed in taking control of Rolls then the cars would continue to be built in Britain and the marque would retain its separate identity.

BMW, he added, had been approached by a number of Rolls owners asking to be associated with any bid it might make. Mr Pischetsrieder ruled out bidding for Rolls' parent company, Vickers, other interests of which include Challenger tanks, the Cosworth engineering business and propulsion systems.

He also refuted reports that it was supporting Mayflower, the automotive engineering group which is expected to launch a pounds 1bn bid for Vickers in the next few days. "We have nothing to do with their bid. I have not had any discussions with them at all," he said at the CBI conference in Birmingham. "I have no interest in Vickers as a company. We are partners in terms of contracts."

BMW has close links with Rolls since it is supplying the new 12-cylinder engine that will power its next generation of luxury cars. But Mr Pischetsrieder said he was not interested in the Formula One engine manufacturer, Cosworth. Its engine had broken down in 28 out of 32 Grand Prix and in any case BMW was developing its own Formula One engine.

Apart from BMW and Mayflower at least four other car makers are thought to be contemplating bids for Rolls, which some analysts believe could fetch up to pounds 600m. These are Daimler Benz, which has retained the US bank J P Morgan to provide advice, Ford and Chrysler of the US and Fiat of Italy, which owns Ferarri.

Although BMW has retained HSBC Investment Bank to advise it, Mr Pischetsrieder said the bidding process for Rolls had not yet started in earnest. He also indicated that BMW may yet not bid because of its other commitments.

The heavily debt-financed Mayflower bid could come as early as today, although some City observers expect it to wait until later in the week. Mayflower will take on about pounds 650m in borrowings to fund the takeover attempt. Vickers' chairman, Sir Colin Chandler, yesterday issued a Stock Exchange statement urging Mayflower to clarify its intentions.