Alchemy abandons Rover bid

Confusion surrounded the fate of Rover this morning as the venture capital firm expected to buy the troubled car company announced that negotiations with BMW had ended.

A brief statements from Alchemy Partners said that it had ceased negotiations with the German owners of Rover because of contractual problems.

The statement, headed "Alchemy and BMW Terminate Rover Talks", says: "Alchemy Partners and BMW have ceased negotiations as they were unable to agree upon certain contractual matters, some of which arose yesterday.

"Alchemy Partners thanks BMW for its constructive and cordial negotiations and wishes Rover and its employees well in the future."

Alchemy had been expected to confirm its purchase of Rover in the next few days, in a move that would have resulted in major UK job losses.

However today's announcement will now strengthen the hand of a rival bid by a consortium led by former Rover executive John Towers, which BMW had previously dismissed.