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Vickers suitor backs down
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November 12, 1997: 12:13 p.m. ET
Mayflower ends bid for Rolls-Royce maker after pressure from BMW
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NEW YORK (CNNfn) - British auto-parts maker Mayflower backed down Wednesday from consideration of a takeover bid for Vickers Plc, whose holdings include Rolls-Royce Motor Cars Ltd., after pressure from BMW AG.
Mayflower last week said it was considering whether to make an offer for the British defense engineering group, a company twice its size, after Vickers signaled it wanted to focus on its defense and propulsion technology interests.
The change of heart came after German auto company BMW on Tuesday said it said it was interested in making a bid for the Rolls-Royce and Bentley maker unit of Vickers. BMW also said it would no longer supply engines to Rolls Royce if Mayflower were to take over Vickers.
"It is BMW's belief that it would be the best purchaser for Rolls-Royce, both to support its existing business and to help in the development of new models," BMW said in a statement.
Calling BMW a "valued customer," Mayflower said it had no intention of bidding for Vickers. However, Mayflower cautioned that it reserved the right to make another bid if the position of BMW changed.
The BMW statement contradicted recent speculation that BMW and Mayflower were working together on a joint takeover.
However, it may not end any potential obstacles for BMW. The auto giant still faces competition in its bid for Rolls-Royce from German automakers Volkswagen and Daimler-Benz and U.S. firm Ford Motor Co.
Vickers has owned Rolls-Royce since 1979 but its new business focus led it to seek a sell-off of the unit, which has attracted extreme interest due its high brand recognition as a symbol of quality.
-- by staff writer Randy Schultz
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