Shares in BMW rose sharply yesterday on speculation that the German luxury carmaker could be the motor industry's next takeover target following the dramatic removal of Mr Bernd Pischetsreider as chairman last Friday.
The strong demand, which saw BMW closing up more than 8 per cent at 726.49 deutschmarks, was accompanied by sharp upgrades from analysts recommending the stock as a speculative or strategic buy. Some analysts predicted that Mr Joachim Milberg, BMW's new chairman, would be forced to take tougher action with Rover, BMW's loss-making UK subsidiary. Top motor industry leaders have joined analysts in suggesting BMW could find itself the subject of a takeover bid. But few believe the secretive Quandt family, which owns about 46 per cent of BMW, would sell. BMW said the company wanted to remain independent.
Heavy losses at Rover and the dim prospects of early recovery lay behind the removal of Mr Pischetsrieder. He had favoured retaining Rover as a volume carmaker, foreseeing the need for heavy investments at its Longbridge plant. Mr Milberg and BMW's largely reconstituted board are expected to retain the broad outlines of that plan.
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