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VW wins Rolls-Royce nod
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June 5, 1998: 10:25 a.m. ET
Vickers holders support 'people's car' maker over BMW's rival offer
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NEW YORK (CNNfn) - Vickers PLC shareholders overwhelmingly voiced their support Friday to sell its Rolls-Royce Motor Cars Ltd. to Volkswagen AG for 430 million pounds ($700 million).
The London-based industrial concern said the official count was 5.1 million for the Volkswagen bid and 109,000 against.
Vickers said Volkswagen provides a parent for the British luxury car maker with the engineering capability, resources, brand expertise and global reach to match Bayerische Motoren Werke (BMW) AG, whose rival bid of 340 million was rejected.
But Rolls-Royce PLC -- a separate company that makes jet engines and controls the brand name and logo -- has made it clear it would rather see the automaker go to BMW, which happens to be its partner in a jet engine venture.
Rolls-Royce PLC hasn't said whether it will negotiate with Volkswagen or try to block its use of the brand name. Asked about that, Vickers Chairman Sir Colin Chandler insisted that a 25-year-old contract that would let Rolls-Royce PLC veto the purchase of Rolls-Royce Motor Cars Ltd. by a foreign buyer is legally unenforceable.
"The trademark can't go anywhere else," Chandler said. "We exclusively own the radiator, the flying lady and Bentley."
The shareholder approval, though, came amid angry nationalistic rhetoric from small investors who wanted Rolls to remain under British control.
"For God's sake, try and take a broad view for the country," said Desmond Lake, drawing cheers in the packed auditorium when he referred to Volkswagen's history in Nazi Germany.
But with 95 percent of Vickers' shares held by institutional investors, support for the Volkswagen bid was a near certainty, analysts and industry observers said.
In addition, Vickers' position was bolstered by news that it agreed in principle to sell its Cosworth engine division to Audi AG, a wholly owned subsidiary of Volkswagen, for 120 million pounds cash, plus debt.
-- from staff and wire reports
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