AERO-engine maker Rolls-Royce plc may yet hold the key to who finally ends up controlling its eponymous former luxury car subsidiary currently being fought over by German rivals Volkswagen (VW) and BMW.
For Rolls-Royce plc stressed yesterday that while it welcomed the previous decision by Vickers to sell Rolls-Royce Motors to BMW, with whom it has had a successful joint aerospace venture for the past nine years, it had yet to take a view on VW which had recently outbid BMW.
According to an agreement in 1973, the aero-maker has rights to ensure preservation and protection of the ''Rolls-Royce'' name.
The agreement has remained in force despite Rolls-Royce Plc selling the car unit to Vickers in 1980 and yesterday a spokesman for Rolls-Royce Plc said the company would take ''whatever action is necessary or appropriate in accordance with its legal rights under the licence agreements to ensure that its interests and those of its shareholders are protected in connection with the proposed sale of Rolls-Royce Motor Cars''.
Rolls-Royce has so far welcomed Vickers' earlier decision to sell the car unit to BMW but has not made any specific comment on the sale to Volkswagen following its #430m bid, which topped BMW's #340m offer.
Volkswagen therefore leads the race to win the prestigious Rolls-Royce marque, especially as BMW appears determined not to be dragged into a bidding war, but may find itself caught in the middle of a legal tussle between Rolls' current parent Vickers Plc and former owner aero-engine maker Rolls-Royce Plc.
Yesterday, Rolls-Royce Plc maintained that the EC had backed its ownership rights over the brand name for now although these comments triggered a heated response from Vickers, which said the European Commission had decided against emergency action but had not yet made its final judgment adding that the sale to VW was not dependent on the case and that VW would have to bear the full risk of possible court action or loss of the ultimate prize - the Rolls brand.
BMW, meanwhile, said it had no plans to come back with a second offer and repeated its threat to cancel engine and component supply contracts if it loses.
Under the VW deal, Vickers plans to return a total of #273m to shareholders, against a planned #188m under the BMW agreement.
Investors will receive 80p per share in the VW deal, up from 55p proposed at BMW's offer price.
VW chief executive Ferdinand Piech said he expected that BMW might submit a new bid but questioned its ability to stay the distance in the race for Rolls.
He also dismissed BMW's latest threat to pull its engines from the new Rolls Silver Seraph car as ''sabre rattling''.
VW later said it was confident of finding a solution even if BMW did carry out this threat which would appear to mean more orders for Vickers' Cosworth engine subsidiary which already supplies many Rolls engines.
n Engineering group Concentric has announced that talks are under way which may lead to an offer being made for the company.
The company emphasised that the talks were at a very early stage, but the group's shares jumped 38p to 145.5p on the news.
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