Ford is expected to draw up a shortlist of preferred bidders for Jaguar and Land Rover this month, with half a dozen companies still in the race to buy two of Britain’s most prestigious car marques.
The car-maker said it hoped to reach a conclusion either by the end of the year or by early 2008. However, it is becoming clear that deciding the future of Jaguar and Land Rover has proved more complex than expected. The two companies, which are being sold together, are attracting attention from both trade and private equity buyers.
India’s Tata group is one of the frontrunners, alongside the private equity groups One Equity, whose interest is led by the former Ford chief executive Jacques Nasser, as well as Ripplewood and TPG. Terra Firma and Cerberus, which bought Chrysler this year, are both seen as being in the running, though industry sources have questioned whether Cerberus would be willing to take on two big car-maker acquisitions so close together.
Indian company Mahindra & Mahindra, thought earlier to have been among the contenders for Jaguar and Land Rover, is said to have pulled out.
Ford is unlikely to make a decision simply on price. It is determined to keep its contracts to supply engines to Jaguar and Land Rover after the sale and is expected to want to retain a stake, with some suggestions that it could keep 10%, similar to its holding in Aston Martin after it was sold to a consortium this year.
Issues such as pension funds and European Union plans to slap statutory limits on car emissions of carbon dioxide also have to be addressed, according to industry sources.
Valuing the two brands is becoming complex. Analysts had estimated they would be worth between $1,3-billion and $1,5-billion, but since then Land Rover has reported strong sales of new models and Jaguar is thought to have reduced its losses. — Â