Last minute bids for Saab

Three parties have shown interest in the Swedish car manufacturer Saab, a subsidiary General Motors is trying to sell. The Dutch Spyker Cars is one.

Dutch car manufacturer Spyker Cars sent eleven e-mails to General Motors (GM) on Thursday night in a bid to acquire the Swedish brand Saab.

But they might yet lose out to Formula-1 boss, Bernie Ecclestone. On Thursday morning, he announced he would be filing a joint bid with Luxemburg-based private equity firm, Genii Capital. Genii Capital already owns a majority interest in Renault’s Formula 1 team.

On Thursday the Swedish daily, Dagens Industri, also broke news of anonymous investors who were supposedly looking to fund a buy-out by Saab’s own management. But the current owner, GM, might still decide to pull the plug on Saab, closing down its factories and effectively putting an end to the Swedish brand’s existence.

For Spyker Cars, the only thing left to do is wait, said Victor Muller, chairman of the car manufacturer’s board. He said he expected GM to announce its plans for Saab early next week. “We have posted a great bid,” he said.

Still, GM’s CEO Ed Whitacre remained sceptical that Saab could be saved. According to Whitacre anyone “with a bag of money” could acquire the Swedish brand, but so far none of the bidders had been able to demonstrate adequately how they intended to finance their takeovers.

Many are interested, but who can pay?

Money is the key issue. In November, it seemed inevitable that the Swedish car manufacturer Koenigsegg would acquire Saab. Many wondered how this small company, which employs 45 people and produces no more than 20 cars a year, – be it at a price tag of one million euros each– would be able to fund the takeover of a competitor the size of Saab. Koenigsegg intended to overcome its small size through a 600 million euro loan, provided by the European Investment Bank and guaranteed by the Swedish government.

When the deal fell through at the last minute, Koenigsegg refused to disclose why, but insiders have said that a lack of funds was the main obstacle. Victor Muller has also declined to explain how he intends to finance the Saab takeover, but claims he has “clearly” shown GM CEO Whitacre where he would be getting the money from.

Spyker’s biggest shareholders are the Russian, Vladimir Antonov, and the government-run investment fund, Mubadala, based in Abu Dhabi.

Money seems to be no object for the other bidders either. One of the directors of Genii Capital is Luxemburg businessman Gerard Lopez. He is also the founder of Mangrove Capital Partners, renowned for investing 130,000 euros in Skype in 2003, an interest it sold to EBay a few years later for 180 million dollars. The 79-year old Ecclestone has made billions selling the television rights to Formula 1 matches.

Swedish heritage might survive

Money – or rather, a lack thereof - is also the main reason GM wants to ditch Saab. In 1990, the company paid 600 million dollars to acquire a 50 percent interest in the company, taking it over entirely ten years later. Their purchase bore the Americans very little fruit. Saab has incurred enormous losses in the last decade; it has approximately 1 billion euros in debt on its books. When GM’s losses skyrocketed to record heights last year – 31 billion dollars– Saab was put up for sale.

Saab’s management is excited about the joint bid by Genii Capital and Ecclestone. “Those men know only to post serious bids that are properly financed,” a spokesperson said.

And so the hope for saving Saab remains alive in Sweden. The brand is considered a part of Swedish heritage. A new owner means new models might still hit the market, something long overdue: the last new Saab, the 9-3, dates back to 1998. In the last few years three cars have been designed and are ready for production. The only thing needed to start is money.