Britain Bows Out of Jaguar Picture : Open for Bids: The government’s departure leaves the luxury motor car maker vulnerable to takeover efforts by both Ford and General Motors.
The British government said Tuesday that it would drop its “golden share” in luxury car maker Jaguar PLC, opening the door to a potential bidding war between two U.S. automotive giants, Ford Motor Co. and General Motors Corp.
The government’s stake was reserved as part of Jaguar’s privatization in 1984 to prevent a hostile takeover. But Trade and Industry Secretary Nicholas Ridley said the government was prepared to waive it to get rid of uncertainty over the firm’s future.
“The restrictions on share holdings entrenched by the government’s special share are now clearly causing uncertainties,” Ridley told Parliament.
The share allowed Ridley to veto any takeover bid or any change in Jaguar’s articles of association, which until the end of 1990 had forbidden any single stake in the company larger than 15%.
“I am clear that it is in the best interests of Jaguar’s management, shareholders and work force for the company’s future to be assured and the present climate of uncertainty resolved as quickly as possible,” Ridley said Tuesday.
The move drew criticism from opposition Labor Party trade spokesman Bryan Gould. “The golden share is a charade. This is a black day for . . . the British car industry.
“The Jaguar badge will simply be placed on cars designed and engineered elsewhere,” he said.
Keith White, a union official, said the news of the government’s decision caused despair at Jaguar’s assembly plant in Coventry, England. “They are throwing us to the wolves,” he said.
Both Ford and General Motors have been stalking the Jaguar’s prestigious “Big Cat” emblem. The maker of sporty luxury cars has been looking for a benefactor since its profits slumped from currency fluctuations and poor sales in the United States, and in recent weeks, GM and Ford have been building stakes in Jaguar with a view to gaining a foothold in Europe.
But as Britain’s last big independent car company, Jaguar has insisted in its talks with GM and Ford that it retain some form of control in any linkup.
Ford, which has said it would acquire the troubled auto maker if allowed to do so, said Friday that it has raised its Jaguar holding to 13.2%.
GM has also received U.S. government clearance to acquire a stake in Jaguar, but it has not disclosed whether it owns any shares.
In Detroit, GM spokesman Jack Harned said: “We will now consider all our options and explore matters further in light of these important new developments.”
He would not say exactly what those options are, but GM has been negotiating with Jaguar over production ventures and the purchase of a minority stake.
A Ford spokesman said the company had no comment on Ridley’s statement.
The British announcement was not expected at Jaguar. “We were not consulted about the matter in advance and were surprised about the action taken,” a Jaguar spokeswoman said.
Jaguar had intended to put any plans about the firm to its shareholders, the spokeswoman said. She would not comment further.
Jaguar shares on the U.S. over-the-counter market rose $1.625, to $13.50, in heavy afternoon trading.
In London, Jaguar shares had risen to $11.79 (7.46 pounds) Tuesday, from around $6.30 (4 pounds) in mid-September, on speculation of a bid for the company.
