Spyker submits revised bid for Saab, other suitors express interest in the unit after GM says it will shut the brand down
By Niklas Magnusson, David Welch and Ola Kinnander
(Bloomberg) — General Motors Co. said it received inquiries from "several parties" regarding its Saab unit after announcing it would close the Swedish automaker following the collapse of talks to sell the division.
One approach was from Spyker Cars NV, which said it submitted a revised bid that will expire today at 5 p.m. in New York. Some asked about assets such as machinery, tooling or the factory at Trollhaettan, Sweden, where Saab is based, said a person familiar with the matter. The end of talks with Spyker last week led to Detroit-based GM's decision to wind down Saab.
The fresh Spyker bid and the other inquiries may revive hopes that money-losing Saab can continue to produce cars. Some 3,500 jobs are at risk, along with thousands of jobs among suppliers to the automotive industry in Sweden. Two attempts to sell the 72-year-old brand have failed over the last month.
"It's very hard to predict the outcome, particularly since GM in principle has taken a decision to shut Saab down," Spyker Chief Executive Officer Victor Muller said in a telephone interview today from Amsterdam. "There's a dialogue ongoing. We're trying to reach an agreement."
Spyker rose 34 cents, or 20 percent, to 2.05 in Amsterdam for its steepest increase since Dec. 2, valuing the carmaker at 44 million euros ($63 million).
Johan Willems, a GM Europe spokesman, had no comment. GM said in a statement yesterday that the company "will evaluate each inquiry," without identifying the parties that made them.
"An 11-point proposal had been submitted to GM, addressing each of the issues that arose during the due diligence process," Muller said in a statement yesterday. It removes "each of the obstacles that were standing in the way of a swift transaction."
In its earlier offer, Spyker was bidding in a partnership with RMC Convers Group, a company owned by Russian businessman Vladimir Antonov, who is the automaker's largest shareholder with a 29.3 percent stake. Mubadala Development Co., a state-owned Abu Dhabi-based investment company, is also a stakeholder of the Dutch maker of $235,000 sports cars.
Spyker's Russian ownership and financial backing was among GM's concerns with its Saab bid, the person familiar with the situation said. It wasn't a single issue that ended the talks, said the person, who asked not to be identified because the negotiations were private.
Other issues included intellectual property and the rights to Saab's vehicle and engine technology, said the person.
Muller said today that Mubadala isn't involved in financing the bid. He declined to say whether Antonov is still participating in the offer.
GM's board decided last month to restructure its European Opel unit as a subsidiary, rather than selling a majority stake to Magna International Inc. (MGA) and Russian lender OAO Sberbank. When Penske Automotive Group ended its bid in September for the U.S.-focused Saturn brand, GM opted to close it.
GM has agreed to sell its Hummer sport-utility vehicle brand to Chengdu, China-based Sichuan Tengzhong Heavy Industrial Machinery Co.
The sale of Saab powertrain technology and tooling to Beijing Automotive Industry Holdings Co. hasn't been affected by negotiations with Spyker or by Saab's winddown, GM said.
"Since we don't know why Spyker's first attempt failed, it's very difficult to judge whether it will succeed this time," Mike Tyndall, an analyst at Nomura Securities in London, said yesterday.
GM and Spyker decided there was "no point in carrying on" after encountering issues that couldn't be resolved, GM Vice President John Smith said on a Dec. 18 conference call.
GM started talks with Spyker after a sale to Koenigsegg Group failed last month. Koenigsegg canceled the purchase, saying delays in closing the acquisition "resulted in risks and uncertainties" that prevented it from implementing a new business plan. Saab was to become profitable by 2012 with annual sales of at least 100,000 cars, according to the September plan.
The European Investment Bank in August delayed a decision on whether to lend Saab 400 million euros to be used for the development of new technology, which it eventually granted Saab on Oct. 21. While the EIB approved the loan to Saab, the bank must re-evaluate the financing with any interested buyer as the new owner before it can be paid out.
The transaction with Spyker had to be concluded this month, GM said before the deal failed. Muller said today that Spyker's revised bid still calls for the loan, although an approval from the EIB is no longer necessary by Dec. 31.
"We have made every effort to resolve the issues that were preventing the conclusion of this matter and we have asked GM and all other involved parties to seriously consider this offer," Muller said. "We are very confident that our renewed offer will remove the impasse that was standing in the way of an agreement, and this would still allow us to conclude the deal prior to the expiry of the deadline originally set by GM."
Spyker reported a net loss of 25 million euros last year, and Muller said Nov. 20 that the Zeewolde, Netherlands-based automaker won't be profitable this year. Lack of cash led it to obtain loans in 2007 from Vilnius, Lithuania-based AB Bankas Snoras in return for a stake of almost 30 percent.
Sweden's IF Metall union said GM must now "seriously evaluate" the new bid from Spyker.
"I understand the frustration that all people who are dependent on Saab feel—to be thrown between hope and despair is terrible," IF Metall head Stefan Loefven said. "GM must now quickly answer with a serious test of the new bid."
To contact the reporters on this story: Niklas Magnusson in Stockholm at firstname.lastname@example.org; David Welch in Southfield, Michigan, at email@example.com; Ola Kinnander in Stockholm at firstname.lastname@example.org.