Gulf stream may sweep over Jaguar-Rover sale
There may be a group of mystery Gulf investors backing one of the three bidders in the fray for Jaguar and Land Rover.
Although the identity of these investors isn’t clear yet, the buzz in the financial circles is that they may turn out to be the decisive factor in the race for Ford’s bespoke brands.
With the backing of the Middle East investors, the valuation game could change gears. So far the speculation over the bids has been that they are all in a close range of around $1.5-2 billion.
Ford’s last luxe brand sale also attracted interest from investors in the Middle East. This March, Aston Martin was sold for $848 million to a consortium comprising Investment Dar and Adeem Investment Co, international investment companies headquartered in Kuwait.
It was fronted by David Richards, founder and chairman of Prodrive, a motorsport and automotive technology company and John Sinders, an Aston Martin collector and backer of Aston Martin Racing. That isn’t the only Gulf connection in Europe’s auto sector. With substantial single digit stake, Kuwait Investment Authority is German auto major Daimler’s single largest shareholder.
Sources say Ford could announce its choice among the three bidders in the next fortnight. Ford officials have said the final decision will be taken early January “at the very latest”. Currently, there is a lot of speculation on the bid amounts with the Tata range pegged at $1.8-2.2 billion, the Mahindra range at $1.7-2 billion and One Equity at $1.6-1.9 billion. These, however, are completely unconfirmed estimates.
Sources say once Ford indicates its choice, there could be negotiations with pension trustees. Ford is looking for definite financial commitments from its preferred bidder but the final valuation would have to include the £200 million in pension deficits that that the two brands have totted up.
Meanwhile, British dealers of the iconic Jaguar have indicated that they are okay with the two Indian companies in the fray, unlike some of their compatriots in the US who had expressed reservations over associating a high-value brand like Jaguar with the makers of cheap volume models. The show of confidence came amidst reports that all three bidders had detailed talks with the dealers to assure them of full support post-buy out.
The American dealers, who announced their preference for private equity firm One Equity, echoed what Ripplewood officials said earlier that there was no cultural fit between Jaguar and the Indian brands in the fray. Ripplewood was one of the bidders for Jaguar-Land Rover but did not make it to the final round.
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