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Rumors race on Lamborghini
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June 1, 1998: 1:57 p.m. ET
VW may add Italian carmaker to its new stable of luxury cars, analysts say
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NEW YORK (CNNfn) - Volkswagen AG, the German automaker that so far has flexed the most muscle in the ongoing tug-of-war for Rolls-Royce, may already be buckling up to take cash-strapped luxury sports car maker Lamborghini out for a test drive, analysts say.
Speculation that VW may be targeting Lamborghini of Italy as its latest conquest has been heating up since VW Chairman Ferdinand Piech confirmed late last month the company is shopping for two more luxury car makers and a commercial truck company.
Lamborghini coupe
Lamborghini is 60 percent owned by the youngest son of Indonesia's former President Suharto, Hutomo Mandala Putra, who denied reports Monday that he is interested in unloading his stake in the company.
Shares in Suharto-linked companies have been hit by heavy selling pressure since his resignation May 21, with investors fearing favorable treatment the companies may have received in the past is over.
Malaysia's Mycom Bhd., however, the property development and financial services firm that owns the remaining 40 percent stake in Lamborghini, confirmed Monday that it was in talks to sell its stake in the company.
"Lamborghini is a smaller company, but it could be them for sure [that VW is interested in]," said Lutz Kunert, an analyst with Auerbach & Grayson in New York. "It's part of (VW's) strategy and it sounds to me like it makes sense."
Kunert added that VW reportedly already has entered into discussions with Scania, a Swedish maker of heavy trucks, buses and engines.
"They are in talks with them, but nothing has been announced," he said.
VW is not commenting on the reports.
In March, Kunert said the company raised about $1.6 billion in a stock offering, money that likely will be used to help finance its expansion plans.
Unions at Lamborghini say the company needs a rapid cash infusion or it could collapse. They have urged the company's owners to come up with roughly $46 million to keep the company afloat.
The bidding war
Last month, VW's $701 million bid for luxury British car maker Rolls-Royce handily topped a $557 million offer from fellow German auto maker BMW.
Now, though, it seems the future ownership of Rolls-Royce's is clouded once again by question marks.
Early Monday, a group of Rolls-Royce and Bentley car fans backed by a British clearing bank and a U.S. billionaire said they are prepared to make their own bid for Rolls-Royce Motor Cars by Wednesday in efforts to keep the company British and, more importantly, out of the hands of preferred German bidder, Volkswagen AG.
The group of institutional, banking and individual backers has formed a company called Crewe Motors, named after the Rolls factory, with the aim of overtaking VW's offer in the final stretch of the bidding race being run by owner Vickers PLC.
The chairman of the group, Michael Shrimpton, a 41-year-old Bentley-driving barrister, said Crewe Motors will send the offer to Vickers by mid-week.
Asked how high the bid would be, Shrimpton said it would be "comfortably ahead of VW," adding the group already has lined up financial commitments of more than $702 million.
If delivered, the new offer will come just days before Vickers shareholders meet Friday to decide whether to back VW's 430 million pound deal or an earlier 340 million pound offer from BMW AG. 
-- from staff and wire reports
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