Reuters: Youngman prepares new bid
Reuters came up with an article on Wednesday giving some info about a new bid for Saab that is prepared by Youngman. I felt like adding my few cents to their report, based on things I heared and my conclusions from that.
The Chinese group remains interested and is prepared to make an offer, which one of the sources said would be worth several billion Swedish crowns.
A second source with knowledge of the process confirmed that a bid was likely next week.
Neither would say how Youngman would get round GM’s objections. The lawyer representing Youngman has said that the firm would seek to develop technology not controlled by GM.
It is no big surprise that Youngman are still trying to get a deal on Saab. They invested quite a bit of money in Saab and they still want to get it done. For them it is also a question of staying independent while the Chinese auto industry faces consolidation. Youngman always wanted to keep as much Saab staff as possible to get an intact business so it is logical that they want to get the deal done asap.
The quote from the lawyer is more or less hinting that Youngman wants, or maybe needs to start the business with a fresh model palette that is independent from GM. The chance to get the licensing from GM will be close to zero as I can’t imagine that GM changed their mind in the last few weeks. But still, as I already mentioned in my post yesterday, if the bring on enough money this is nothing that can’t be done.
Both sources said there were risks to a bid because receivers were preparing to sell parts of Saab’s business to engineering firm Semcon SMC.ST. That would leave little for a buyer interested in continuing to build cars, the sources said.
“The big danger is that Saab and Semcon have agreed a deal with the receiver over large parts of Saab Automobile that would make it impossible for anyone to buy Saab as a whole,” the second source said.
As we learned on Tuesday Hemfosa refused to agree to the Semcon deal because they want to utilize the factory as a whole. But from what we heared from our sources the Semcon bid included parts that are nice to own if you want to develop cars but on the other hand it’s nothing that you could not rent when you need is. And as Semcon is a engineering company they would surely be willing to help out.
But earlier in the process NDO, just like Hemfosa now, emphasized that they prefer Saab to be sold as a whole. As there are parties who are interested in buying the complete package the receivers will put their effort in striking such a deal rather than selling of big parts now. The museum may be an exception as it is not relevant for production but can bring on some money to continue the process.
Another obstacle is that the receivers have yet to provide information about exactly what assets are for sale, the second source said.
“You don’t know if the brand rights are for sale … if the technology is for sale. There is no information available,” the source said.
This is something the receivers have spent a lot of time on – one would hope that the press conference may give some info about that. We still have no info if they follow the invitation by Youngman to come to China and examine the plans. If they do I’d tend to think that they completed that issue.
Without GM’s technology licenses and production contract, analysts have said, Saab would be unable to continue in its present form.
Saab’s PhoeniX platform, expected to be the base of future models, relies very little on GM technology. But any buyer would have to invest heavily to complete the development of PhoeniX.
First of all, the investment in the Phoenix platform needs to be done no matter if GM agrees to sell licenses to the current Saab models. As I stated before, I don’t see GM granting rights to the 9-5 and 9-4x but maybe an agreement on the current 9-3 could be found, and even if that excluded China it would allow the factory to produce some cars. In any case this could be better a complete standstill. There was even some talk that Youngman could assemble some new Lotus model for Europe in Trollhättan.
This is until the first Phoenix based cars can hit the market, maybe in two years from now. A complete restart will cost quite a bit of money but getting free of those licensing chains can only be a good thing.
Any buyer would also have to get permission from defense and security company Saab AB and truck maker Scania to use the Saab name, as they still own the rights to the brand.
I think that a solid buyer has a good chance to get the rights to the name. At least the receivers have added one more lawyer just to deal with that issue so this is something they definetely work on.
I just hope he receivers are now finally ready to get into talks with potential suitors. It’s about time.