bmw rules out further bid (long)

[Dave Eaton <dave.eaton@minedu.govt.nz>]

from today's times...

BERND Pischetsrieder, the BMW chairman, yesterday declared the German car maker
will not raise its bid for Rolls-Royce Motor Cars, insisting that the £340
million offer still has a chance of success. 

The bid was gazumped last week by a £430 million offer from Volkswagen that
prompted the Vickers board to switch its allegiance from BMW to VW. 
Despite the widespread expectation that BMW would respond with the promise of
more money, Herr Pischetsrieder told shareholders at their annual meeting
yesterday that he would not "withdraw" or "change" the bid "under any
circumstances". 

BMW insisted this was not an admission of defeat. A spokesman pointed to the
agreement it has struck with Rolls-Royce plc, the aero-engine maker, to use the
Rolls-Royce name under licence and said: "We think the offer is still the most
attractive." 

This stance baffled one leading Vickers shareholder, who said: "Superficially,
it's hard to see what grounds they have for optimism." 

Vickers has said categorically that there is no chance of its shareholders
paying a fee to transfer the Rolls-Royce name if VW won, no matter how much
Rolls-Royce plc wanted for the privilege. 

This could have been an obstacle to shareholder acceptance, especially since
Rolls-Royce plc has made it clear that it is supporting BMW. However, Vickers
insisted that Volkswagen is liable for any payments it might have to make to
Rolls-Royce plc, as well as the cost of replacing the engines that BMW is
threatening to withdraw. 

Volkswagen corroborated this yesterday and said there was no possiblity of the
payment to Vickers being deferred if its plans to develop Rolls are bogged down
by disputes. A spokesman said: "There are no conditions to our deal. These are
third-party issues." 

One source involved in the auction said he was baffled at the BMW actions. He
said: "Maybe BMW is being extremely naive or maybe they intend to come back at
the last minute with a higher offer." 

Rolls-Royce plc will not talk to Volkswagen about the use of the name until
after the vote. Until then, it is remaining staunch in its support of BMW,
which it says would be a worthy custodian of the valuable Rolls-Royce brand. 
If it continues to oppose a triumphant VW, the German carmaker could,
theoretically, continue using the Bentley brand name, which Rolls-Royce plc
does not own, until all disputed issues are resolved in the courts. 
Vickers published details yesterday of a 112-page circular it is sending to
shareholders about the auction. The statement repeats its reasons for selling
Rolls and for accepting the Volkswagen offer.