I’ve just been chatting with a contact at Saab in Sweden and he’s provided me with the following information:
- The investment process moves into a more intensive phase
- Over 20 potential investors
- Small number of auto companies interested but the majority are investment groups
- Interest comes from Sweden, elsewhere in Europe, the US and Asia Pacific region
- All have been vetted by Deutsche Bank and have the capability to become investors
- All have signed confidentiality agreements and have been sent a ‘teaser brochure’
- Some have moved into the next phase and have either visited Trollhättan already or have booked a visit in order to take part in more detailed discussions.
Note that Deutsche Bank are engaged by General Motors to find Saab’s buyer, which means that GM’s interests are paramount in this process, but also note that GM’s best interest is served by Saab surviving to engage in future contracts with them. It’s hopefully going to be a win-win.
——
I noted in comments as I was putting this together that there’s also coverage at Reuters and in the Swedish media (thanks ctm)
E24 report the following:
“There are now 27 interested parties to Saab Automobile. Yesterday, the first of them visited the Saab factory in Trollhättan.
- Interest has been growing. Saab has signed confidentiality agreements with 27 potential buyers. The interest from Wednesday’s visitors was very large, a source tells Dagens Industri.
One interested buyer per day are received by Saab, so the this period is expected to be rather long. First, the “heaviest” ones visit factories and meet with management, and yesterday’s secret visitor was one of the more serious buyers.
Saab is reported to first talk to those who have the greatest capacity, capital and skills to take over the auto company.”
And Reuters have this to say:
Loss-making General Motors unit Saab Automobile said on Thursday it had signed confidentiality agreements with 27 potential suitors in its efforts to find a new owner to help it survive the downturn.
Saab’s court-appointed administrator said earlier this month that about 20 potential buyers were looking at the company and that a deal was expected to be completed in June.
“It is of course positive that there has been this level of interest,” Saab spokeswoman Gunilla Gustavs said.
The Swedish carmaker had held meetings with representatives of potential buyers this week, she added.
“We are now in an intense and more organized phase of presenting the company to potential interested parties,” she said.
——
Thanks to ctm and Tompa/Moose in comments!
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{ 33 comments }
Whenn will Reuters stop tallking abut SAAB as an
I mean GM NA has created more losses in the last couple of years than SAAB in the last 20 GM-owned years.
I think the journo’s have got some kind of predicta-text feature where anytime SAAB is mentioned they have to include “loss-making’in the sentence. Either that or the’re on a bonus program according to how many kicks they can get in while SAAB is down.
Thanks for the coverage Swade. This is encouraging.
Saab must have better financials (scrubbed of GM overhead and transfer charges, whatever) to show if the number of interested (and seriously qualified) parties keeps growing. from “3 to 6″ to ten to twenty, now twenty-seven?
Chrysler in a shotgun marriage with Fiat, Saturn’s sole hope is a dealer buyout, how many looking at Volvo or Opel?
This is great news, this much interest means Saab’s mojo is still powerful.
I mean, when was the last time you heard 27 buyers were interested in buying ANY company?
I agree, it should have read “Loss-making GM’s Swedish unit Saab Automobile…..” Is Reuters part owned by GM owned or something?
But Saab is not realy loss making. GM see to that figures are kept cleasner through Saab..
Well, I think one of yesterdays visitor were from another car maker in Sweden. But they are making faster cars…
That would be very very interesting, especially considering the Quant concept. Some really interesting ideas they have there, which fit the “new” ideology of Saab.
Koenigsaab???
The only mainline car co flush with zillions at the moment is Porsche.
If K-egg were one of the more serious buyers, I wonder what ‘less serious’ could mean, then ?
Hey c’mon riku, Konnigsegg are serious, just ask Horacio Pagani at Zonda.
Hmmmm, Porsche…..
It would be interesting if Tompa could share some of his knowledege about the internal GM accounting.
It would be interesting to hear what the true figures are.
PT, what about Erich Bitter ? Not serious, but so… bitter. (btw there would even be the obvious synergy of using GM architecture…)
If Saab is branded as GMs loss making unit, than GM would be preassured to sell of Saab even faster by the US politcians, so not to bad, in consideration that some investors might only afford Saab at half price, and that GM need the good-will-publicity of letting Saab go, in other ways than a bankruptcy.
And Im glad that the investors are non-car companies, as they would do less of intgrating saab into other brands, instead they would be building / developing a stronger brand, in other words what is best for saab.
Asia “Pacific”, puzzels me though, are we looking at a potential buyer other than the usual suspects from mainland china.
Finally, I just got a crazy day at work today, my job in the construction industry is usually quite slow these days as a result of the Economic Downturn. For some reason for the last few days, all the clients that gives my company jobs but went for sleep in the last year, has suddenly started calling on the phone again, not just one but many. Seems like a small indication that companies are wanting to start investing again, or atleast is sniffing around for bargains. If this is close to the bottom of the downward spiral in Asia atleast, maybe Saab is being sold at the perfect time.
Cheers.
As much as we all may like Porsche, it would nowadays be dreadful for Saab. Saab would be lost amongst Audi, VW, Seat and Skoda. Hasn’t Saab had enough of that sort of problem with GM? I seriously hope Porsche doesn’t bid for Saab unless it could keep Saab sererate in some way, but that I think is impossible.
Koenigsaab! Ha, Ha, Ha…wouldn’t the Stig have a time with that? I like it!
“Loss-making General Motors unit Saab Automobile”
Man, I’m so sick of that. My God I hope (in the case of SAAB) that THE BEST REVENGE -IS- SUCCESS, that SAAB becomes more of a success than GM has EVER been. It’s funny, SAAB has been in this predicament because of the Parent Company, let me say that again, Parent Company………
Unless some oil prince has invested into Koenigsegg, they are lucky to keep their business running, let alone buy some other firms.
A The Local article in English about it all:
http://www.thelocal.se/18892/20090416/
Love the Local articles – I always get sidetracked checking the “out on town” pics of hot Swedish babes they have.
As for Koenigsegg, it is possible that if a wealthy Arab sheik is indeed one of the serious bidders for Saab, he may also be contemplating buying the supercar maker and creating a mini Swedish conglomerate.
Nevermind “a badge-engineered Vectra”, our Saabs will be rebadged Koenigsegg CCXs. How cool is that, huh?
Kroum, Koeingsegg cars have that seriously Saab 900 curved windscreen so ya never know. Imaging a 9-5 XWD with that K engine. Saab’s very own M5! Yowzahh!!
I am so glad to hear Saab is generating interest whereas GM is drawing a ton of negative press. Saab did the right thing by sorting its out problems out before GM became the dire mess it is. JAJ is a god in my books for his vision!!
As a lawyer who regularly represents companies in M&A transactions (both sellers and buyers), in my view the fact that 27 parties have signed a confidentiality agreement does not mean much at the end of the day. In fact, I would go so far as to say that this figure provides us with next to no insight as to buyer interest in Saab.
In a competitive M&A sales process for a company (as in the case of the sale of Saab), companies with any interest at all in a company or the industry in which such company operates regularly sign confidentiality agreements in order to get their hands on an information memo (and the valuable information contained therein), even if they have zero interest in purchasing the target. Remember, there probably was a small army of analysts at Deutsche Bank, GM and Saab putting together this info memo – it’s likely to be 100 plus pages long, plus pro forma stand alone financial information for Saab (GM’s accounting is so screwed up, the bean counters probably had to do a lot of work to separate out meaningful financial data for Saab). I am sure thousands of hours went into preparing it, and accordingly it’s a nice bit of info on a car company and the indurstry.
The signing of a confidentiality agreement only shows that there are 27 parties interested in getting their hands on the info contained in the information memorandum – not that they are actually interested in buying the company.
I would presume that the next phase following the execution of the confidentiality agreement (let’s call it Stage II) would be for interested parties to submit non-binding indicative bids, on the basis of which GM would pick two or three serious parties to move to the next stage (let’s call this Stage III). In Stage III, the selected “preferred bidders” would be invited to do legal, tax and financial due diligence on Saab (this is likely to take months with a company of this size and complexity – think of the labour and intellectual property issues alone!), and negotiations would take place which would end (hopefully) in each party submitting binding bids. The party submitting the binding bid which is picked as the “winner” by GM would then proceed to signing the share purchase agreement and other transaction documentation.
This is the way these processes are normally structured in my experience (having advised clients in similar M&A processes over the years). I am sure that there is a process letter accompanying the information memorandum setting forth the rules of the process along the lines of that described above.
Accordingly, the real interesting information will be the number of parties who submit non-binding indicative bids. These are parties who actually have an interst in purchasing SAAB, as they will actually go through the trouble of putting together a bid. Signing the confidentiality agreement does not cost anything – and potentially could be of great benefit to a party signing it.
Accordingly, the number of persons signing the confidentiality agreement is NOT a good guage of interest, and I caution everyone from getting too excited by this seemingly high number.
Sorry to dampen anyone’s enthusiasm.
Ed K.
That may be. But no one can argue against that fact that 27 prospective buyers asking for information is better than only 2 doing the same.
At least potentially you’ll have more suitors when the number is as high as 27.
But, as Ed K. said, some might be looking for insight/info into SAAB and/or the Auto Industry. The next stage is crucial, as serious buyers will perform some Valuation exercises and some preliminary non-binding offers will be made based on those. Then, keeping in mind that SAAB is seen by buyers as a distressed company, the REAL (and most fun IMHO – I miss it a lot) buyers/sellers game starts!
I’d like to see an Aero X with a Koenigsegg power plant. And like it was said above, a top spec 9-5.
The next 9-3 and 9X/Air can sport a lesser 325HP 2.0 twin turbo.
The K-Segg powerplant is a Mercedes V8 as I recall. If its good enough for them , Brawn GP and RedBull F1…… certainly a torque-focussed engine.
“GM offers Saab for free” (Auto Motor und Sport citing Financial Times)
http://www.auto-motor-und-sport.de/news/saab-verkauf-gm-offeriert-saab-zum-nulltarif-1200970.html
English Version @FT
http://www.ft.com/cms/s/0/eecd70fe-2ab0-11de-8415-00144feabdc0.html?nclick_check=1
It seems like GM is willing to give SAAB Away for free.
What I most like from the article is the fact that FT’s description of SAAB
sounds much better than Reuters’s
Update on Bloomberg.com (since SWade is partying in Sydney, you can find the link at news.google)
most interesting points:
“…bidders include an individual investor, a consortium of Swedish companies and at least two private equity firms, said the person, who didn’t want to be named because the talks are private. None of the most likely bidders are automakers, the person said. …as many as 27 potential buyers, including car manufacturers as well as investment companies from all continents, [Eric Geers quote] …The [Swedish]court may grant the company extensions of up to one year in total in three-month steps. … [JAJ] intends to focus on four new models in the next 18 months that emphasize engineering and safety and promote the company’s turbo-charged engines. Saab predicted it will make fewer cars in 2009 and 2010 than the 93,000 produced last year, and that it needs to make 130,000 cars to break even. …
GM, which has taken over most of the claims on Saab to become Saab’s largest creditor with more than 90 percent of the total claims, is likely to agree to write down Saab’s debt by 75 percent, as proposed in Saab’s restructuring plan, Geers said. GM has claims on Saab of 9.6 billion kronor, Saab said April 6.
“I don’t see the writedown as an issue or hindrance at all,” he said. “Talks with GM are proceeding in a great way.”
Six serious buyers is great (Chrysler eat your Jeep out).
What I want to know is who are the investors from Australia and Antarctica??? I mean, EVERY continent? Is SWade really with his investment banker in Sydney?
(ok,am watching 5 years of MI-5 in two weeks, so conspiracy theories are everywhere. saving the exploding 9-3 in season 6 for May)
LAtest news out of germany:
Saab to be sold for $0 !!
AMS reports in Germany that GM is willing to give Saab away “for free”:
http://www.auto-motor-und-sport.de/news/saab-verkauf-gm-offeriert-saab-zum-nulltarif-1200970.html
I don’t know which is the most interesting GM-E Unit, but at this point SAAB has 27 interested partys, I’ve read somewhere 10 will go to the next step, and Opel 6.
I think both companies will be there next year and the year after, and I think both european companies will offer beter products without the american mother, but this shows which brand (loss-making or not) has mojo and which not.
To get SAAB for a buck and a half means you will have to pay back a billion Dollars in loans – 400 millions from GM and 600 from the EIB – and don’t forget about the interest rates.
And that’ll just be the entry fee.
To buy SAAB sure is a more limited risk than buying Opel.
Still, it’ll require a lot of financial power – and a lot of commitment, too.
Me: what I see is Opel/Vauxhall as a part of ‘New-GM’ (the post Chapter 11 entity), following the same ownership model as GMDAT which IIRC is 48% or 49% owned by the Korean Development Bank. I think Chancellor Merkel could live with that in order to save jobs.
SAAB is certainly and obviously going independent, and I personally find it to be a much more interesting company to follow that route because it has a lot of potential/value as a BRAND, not just a badge like Opel/Vauxhall.
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