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Ford shortlists Jaguar buyers

The Tatas may start the due-diligence to takeover Jaguar and Land Rovers, reports Indulal PM.

business Updated: Jul 28, 2007 04:39 IST
Indulal PM

The Tatas may start the due-diligence to takeover Jaguar and Land Rovers-- which are being put on the block by US auto major Ford---next week.

Senior executives from Tata Motors and the investment banking team are currently in London to kick start the due-dligence.

"Senior Tata officials are already in London. They will start due diligence from next week," said a source close to the transaction.

Sources close to Bombay House, the business headquarters of Tatas, said that the team would examine the balance sheets of Ford and discuss synergies of acquiring Jaguar and Land Rovers brands.

Arun Gandhi, the Tata Sons’ director and the man who clinched the Corus deal, is expected to lead the team of negotiators. Arun Gandhi is also believed to be in London now. Gandhi, who is understood to be busy with Corus integration, may get busy with the Ford transaction sooner than later. A Tata group spokesperson declined to comment on the issue.

According to investment banking sources, the advisors of Ford, Goldman Sachs, HSBC and Merrill Lynch are in talks with the prospective bidders and would ask for binding offers by the end of this month. Ford said on July 19 that it had received two offers but did not specify the bidders. Ford and Lehman Brothers have separately valued the both Land Rovers and Jaguar together at $3-7 billion.

Tata Motors and Mahindra & Mahindra are in the race to acquire Jaguar and Land Rovers. Tatas are understood to have appointed Citi group as advisors for the deal, while private equity funds including TPG, Carlyele and Cerebrus Capital are eager to join hands with Tatas for the buyout.

International media quoting Ford chief executive Alan Mulally that 'Ford is open to different options including retaining a minority stake in the company'.

Ford bought Land Rover from BMW in 2000 for 1.8 billion pounds. It acquired Jaguar from British government in 1989.

This would be Tatas second biggest acquisition in the UK. Earlier this year, it acquired Anglo-Dutch steel maker Corus for $12.3 billion. Mahindras are also keen on global buyouts.