Losing Bidder May Contest Sale of Britain’s MG Rover

Shanghai Automotive Corp., which lost out Friday in the bidding for Britain’s MG Rover, said Sunday that it was considering a legal challenge to the decision to sell Rover to another Chinese state-owned company, Nanjing Automobile.

“We are considering all options including legal action,” said a Shanghai Automotive spokesman, holding out the prospect for a rare legal clash between Shanghai, China’s biggest carmaker, and Nanjing, the country’s oldest automaker.

The bidding followed the collapse of MG Rover in April under debts of $2.45 billion, with the loss of 5,000 jobs after the carmaker was forced to close its production plant at Longbridge in central England.

The Shanghai Automotive offer, tipped to win the bidding war, was favored by unions that said it offered the prospect of creating the most jobs in Britain.

A spokesman for Shanghai Automotive said the company “has put in a superior offer, with better prospects for employment and [British] car production, and it has been denied the ability to have its final offer considered.”

Nanjing said Friday that it would relocate MG Rover’s engine plant and some car production to China and promised to employ as many as 2,000 British workers as it partly revives production of the venerable brand.

It aims to produce at least 80,000 MG sedans and sports cars within five years and create a research and development facility.

“We were very satisfied with the process and have nothing more to say,” said a Nanjing spokeswoman.

A source familiar with the situation said Nanjing’s purchase price was between $87 million and $174 million.

Shanghai Automotive, which pulled out of a joint venture intended to save the carmaker earlier this year, had launched a joint bid for MG Rover’s assets with a consortium headed by former Ford Europe boss Martin Leach.

Shanghai Automotive already owns the rights to build the Rover 25 small car and Rover 75 sedan.