Eight days after Vickers said that it had a deal to sell the British car company to BMW, it announced a new deal with Volkswagen. The BMW deal is worth pounds 340m, but Volkswagen is believed to have put in an offer for pounds 430m.
In a statement, Vickers said it had reached an agreement to sell the Crewe-based Rolls-Royce Motors to Volkswagen. It also said that BMW had the right to terminate its agreement in the wake of the new offer.
It added that the directors of Vickers would recommend that shareholders reject the sale of Rolls-Royce to BMW, and instead recommend the Volkswagen offer.
If this offer is successful, it will deal a significant blow to BMW's ambitions of increasing its hold on the British motor industry. BMW already owns Rover and supplies German-made engines for Rolls-Royce, but Volkswagen plans to use British-made engines. Another subsidiary of Vickers, Cosworth, already supplies engines to Rolls-Royce. Vickers' chairman, Sir Colin Chandler, said: "Throughout the ... sales process, we have focused on achieving the maximum value for our shareholders and this remains the case."
The final decision on the future of Rolls-Royce will lie with Vickers shareholders, who will vote on the offers at special meetings on 4 June. If the new deal goes ahead, investors will land a windfall of pounds 273m, worth 80p a share.
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