GM Mulls Saab Inquiries as Spyker Makes New Bid
By Niklas Magnusson, Jeroen Molenaar, and David Welch
(Bloomberg) — General Motors Co. said it received inquiries from "several parties" regarding its Saab unit after announcing it would close down the Swedish automaker following the collapse of talks to sell the company.
One approach was from Spyker Cars NV, which said it submitted a revised bid that expires at 5 p.m. U.S. Eastern Time tomorrow. Some asked about hard assets such as 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.
"We will evaluate each inquiry," GM said in an e-mailed statement today, without identifying the parties that made them. "We will not comment further until these evaluations have been completed."
The fresh Spkyer 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.
"An 11-point proposal had been submitted to GM, addressing each of the issues that arose during the due diligence process," Spyker Chief Executive Officer Victor R. Muller said in the statement. It removes "each of the obstacles that were standing in the way of a swift transaction," he said.
In its original offer for Saab, 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 shareholder of the Dutch maker of $235,000 sports cars.
Spyker's Russian ownership and financial backing was among GM's concerns with Spyker's original 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.
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 Saab's winddown, GM said.
Spyker is "convinced we have a chance to rescue Saab," Muller said in a telephone interview today. Saab is "a viable business on a standalone basis," the Spyker CEO said.
"Since we don't know why Spyker's first attempt failed, it's very difficult to judge whether it will succeed this time," said Mike Tyndall, an analyst with Nomura Securities in London.
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 conference call on Dec. 18.
GM started talks with Spyker after a sale to Koenigsegg Group failed last month. It canceled the planned 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 ($573 million) 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. Spyker had said its earlier bid for Saab hinged on the European Investment Bank approving a €400 million ($537 million) loan for the development of new technology by the end of December. Muller said today that, in the new offer, approval isn't needed before 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 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.