The British government said today it will drop its “golden share” in luxury car maker Jaguar that could be used to block outside companies from staging a takeover bid.
The share was set up as part of Jaguar’s privatization in 1984, but Trade and Industry Secretary Nicholas Ridley said the government is prepared to waive it to get rid of uncertainty over the firm’s future.
In the last few weeks, U.S. automotive giants General Motors Corp. and Ford Motor Co. have been building stakes in Jaguar with a view to gaining a foothold in Europe.
The golden share allowed Ridley to veto any takeover bid for Jaguar, or any change in Jaguar’s articles of association, which until the end of 1990 forbid share holdings over 15%.
Ridley said Jaguar’s articles of association would have to be changed--requiring a 75% majority of shareholders--before the share could be dropped.
But industry analysts said Jaguar stockholders would be enthusiastic to back a change in the articles so a full bid could take place.
Ford, which has said it would acquire the troubled auto maker if allowed, said Friday that it had raised its Jaguar holding to 13.2%. GM has also received U.S. government clearance to acquire a stake in Jaguar.
In Detroit, spokesmen for both Ford and GM had no comment on Ridley’s statement.
Over the weekend Chairman Edzard Reuter of West Germany’s Daimler-Benz said his company had also had talks with Jaguar.
Jaguar’s profits have been eroded dramatically by foreign exchange fluctuations and poor sales in the U.S. market, its largest.