BMW subject to takeover moves after reshuffle

Two days after a boardroom reshuffle that saw its two top executives resigning, the German car maker BMW was last night at the centre of renewed take-over speculation. The joint chief of Daimler-Chrysler, Mr Bob Eaton, said that BMW was now a target for bigger firms and predicted that three or four take-over bids would be on the table by today.

BMW's majority shareholders, the Quandt family, insisted that they had no intention of selling the company and claimed that the appointment of Professor Joachim Milberg as executive chairman would strengthen the Bavarian car manufacturer.

Speculation about a possible take-over was heightened at the weekend following a report that losses made by Rover, BMW's British subsidiary, were almost twice as high as originally feared. The news magazine Focus claimed that Rover lost 1.8 billion deutschmarks last year and was expected to lose DM2 billion this year.

The most likely companies to attempt a take-over of BMW are Ford, Renault and Volkswagen but none of these firms were prepared to comment on the rumours yesterday.

However, a BMW spokesman did say that it is negotiating with the British government to secure financial backing for Rover.

He did not say how much money was involved, although the British press put the figure at between £150 and £300 million pounds (€217 and €434 million).

BMW paid €3 billion for Rover in 1994, but the unit has been a liability ever since. Last year, Rover brought in a loss of some €770 million euros.

The head of BMW, Mr Bernd Pischetsrieder, was abruptly replaced on Friday by the car maker's head of production, Mr Joachim Milberg, reportedly because of the sharp losses caused by problems at Rover.

The British Trade and Industry Secretary Stephen Byers contacted managers at BMW on Saturday in a bid to seek assurances about the future of the plant, in Longbridge, England.