LONDON - In a surprise announcement last Thursday, just hours after the DaimlerChrysler press conference, Vickers plc said it would ask shareholders to sell Rolls-Royce Motor Cars to Volkswagen instead of to BMW.
Vickers Chairman Colin Chandler said: 'Throughout the Rolls-Royce Motor Cars sale process we have focused on achieving the maximum value for our shareholders, and this remains the case.
'I am confident as to the strong prospects for Rolls-Royce Motor Cars under the ownership either of BMW or VW.'
The matter will be voted on by Vickers shareholders on 4 June.
If BMW withdraws its offer, stockholders would have only the VW bid to consider. VW is offering $710 million cash, $150 million more than the BMW offer that Vickers accepted on 30 March.
According to Volkswagen sources, VW bid $445 million on 24 March. Two days later, BMW bid $560 million.
Volkswagen then offered $625 million, but Vickers chose the BMW bid because of its overall nature, including a promise to invest $1 billion over 10 years and to keep a British management team. The latest VW bid included a British management team.
BMW's management board is scheduled to meet on 12 May to consider its options.
'There is no comment on the next steps we are taking,' said a spokesman. 'We stick to what we said before: that we will stop delivering engines to Rolls-Royce if a competitor would buy it.'
The spokesman said BMW would also stick by earlier statements from chairman Bernd Pischetsrieder and not raise its bid.
The announcement was a surprise, even though Volkswagen had said it would make a higher bid.
'It has taken us completely by surprise,' a senior Rolls-Royce official said.
Cosworth could be involved in continuing negotiations.
The Volkswagen bid did not include Cosworth, Vickers' engineering subsidiary.
The Vickers statement announcing the proposed VW deal said: 'VW has advised Vickers that it would be VW's preference to source engines for Rolls-Royce Motor Cars from within Britain.
'Vickers and VW intend to review how the relationship between Rolls-Royce and Cosworth should best be continued in the future.'
The VW purchase price of $710 million values Rolls-Royce as being free of net debts. It is based on operating assets of approximately $246 million.