LONDON - Several carmakers have quietly expressed interest in buying Rolls-Royce Motor Cars. None have publicly declared their intent, though Mayflower Corp., the aggressive UK supplier, said it will consider a hostile bid for Rolls' parent company.
Rolls has been put up for sale by Vickers plc. The UK conglomerate said it wants to concentrate on its core defense business. Vickers bought Rolls in 1980.
Vickers Chairman Colin Chandler described 'a growing number of companies expressing interest in Rolls-Royce Motor Cars.' BMW is considered the front-runner because of existing ties with Rolls. Chairman Bernd Pischetsrieder has frequently said that Rolls-Royce would be a good fit with BMW.
BMW maintained a blackout on information surrounding a possible purchase. 'We will not debate or discuss the situation in public,' said a spokesman.
BMW will supply engines for a new generation of Rolls and Bentley models. The first of the new-generation sedans is expected to appear next year. Rolls versions will use BMW's V-12 engine. Bentleys will use twin-turbo derivatives of the BMW V-8.
A memorandum of sale is being prepared by investment banker Lazard Brothers and being forwarded to possible buyers.
A Vickers spokesman said the sale process will take months rather than weeks.
'Our duty is to get the best value for the shareholders,' he said.
A Vickers insider said six to nine firms have expressed interest in buying Rolls, including BMW, General Motors, Daimler-Benz and one Asian company. Not all are automakers. Vickers has said that it would prefer to sell Rolls to a major automaker.
None of the auto companies confirm that they have approached Vickers about acquiring Rolls.
In a statement, Mayflower said it is 'considering all its options, which may or may not include an offer for Vickers.'
Led by its aggressive chairman, John Simpson, Mayflower has expanded rapidly through several acquisitions since it was formed in 1989. Revenue has grown from £65 million ($107 million) in 1992 to an expected £350 million in 1997.
Vickers said Mayflower's potential bid would have no effect on the process of selling Rolls-Royce.
'As far as we're concerned, it's business as usual,' said a spokeswoman. 'It's something of a phony war at the moment, and we're still looking at all the interest that has come in.'
Mayflower already has close links to Rolls-Royce. It will engineer and provide tooling for the new sedan bodies. It also builds the complete body-in-white for Rover's MGF sports car and makes body panels for Aston Martin and the Land Rover Discovery and Freelander.
Mayflower owns the former IAD engineering and design consultancy and also makes bus bodies and seat belts. Its stamping plant in West Virginia, USA, makes body panels for Chrysler's Plymouth Prowler and the large one-piece roof stamping for the Mercedes M-class sport-utility.
Vickers owns the Bentley name outright, but Rolls-Royce plc, maker of airplane engines, owns the Rolls-Royce name.
Technically, the engine company could withhold the name if it deemed the purchaser unworthy, said a Vickers spokesman. However, he predicted that the right to use the Rolls marque would not be unreasonably withheld.
Rolls-Royce plc is unrelated to the carmaker.
Daimler-Benz is moving into the super-luxury class. Daimler showed the large and sophisticated Mercedes-Benz Maybach super-luxury car prototype at the Tokyo auto show in October. It is aimed at the Rolls-Royce market (see story on Page 18).
London financial analysts estimate the value of Rolls-Royce's physical assets to be in the range of £250 million-£300 million ($400 million-$490 million). But the prestige and status of the marque will increase its value to as much as £500 million.
Ford bought Jaguar in 1989 for $2.6 billion.
Rolls-Royce Motor Cars spokesman Richard Charlesworth said the buyer's nationality is unimportant. 'The essential Britishness of the product is derived from our concentrated skills base at Crewe,' he said, 'the way our 2,500 craftsmen put the cars together.'
In 1996, Rolls-Royce sold 1,744 Rolls and Bentley cars. Through September 1997, sales were 9 percent ahead of last year. Sales peaked at 3,333 in 1990 but plummeted to 1,100 two years later in Europe's recession. The workforce in Crewe before the recession was 5,000.
Rolls says it will need to become even more competitive.
'We've realized,' said Charles-worth, 'that we have to take a big leap forward in both our production and our product.'