FT.com name third Saab bidder – Merbanco

Thanks to Ted in comments, I’ve managed to track down an article at the Financial Times which puts a name to that mystery western US bidder that I mentioned last week.

Three groups have entered bids for Saab, General Motors’ insolvent Swedish car brand, and GM will choose a preferred bidder by the end of this week in a spin-off it will largely finance itself.
Koenigsegg, the Swedish supercar maker; Renco, a private holding that bought and turned around the maker of Humvee military vehicles, and a third group of investors from the US state of Wyoming have expressed interest in Saab, according to two people briefed on the sale.
GM has invited the three groups to meet for talks this week, ahead of the planned signing of a memorandum of understanding with one or more of them, according to one of the two people, who requested anonymity because details of the sale are confidential. Koenigsegg and Saab declined to comment, and Renco was unavailable for comment on Monday…..
….The third group, private investors who trade as Merbanco, could not be reached for comment on Monday.

Merbanco do not have a website as far as I can tell, but I have some leads and hope they’ll be willing to talk a little about their plans for Saab.
So far we have worries in terms of Renco’s record and worries in terms of Koenigsegg’s scale and finance. If these guys were as liked as sources last week said they were, then now’s a good time to say why and sell your message.

UPDATE: I’ve tried a few different contacts and have managed to compile some info, but it seems Merbanco have gone to the mattresses. We’ll see what pans out overnight (US time)
Remember, they haven’t confirmed this to FT.com as yet, so we’re all chasing our tails a little on this one.
The geography fits, though, and as a few have noted in comments, there’s a fair bit of money in tax-friendly Wyoming.

Djup Strupe and an update on the Saab sale process

RE-Posted
This is the biggest entry of the day, so I thought I’d re-post it back to the top of the site. Subsequent entries continue below


I’ve been collecting bits of information for the last few days about various players in this Saab sale process. I think we’re at a point now where I need to put some of them on paper.
These are the collected tips from several Djup Strupes (that’s swedish for Deep Throat) who are well placed to know.
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Bidder re-emerging
I don’t have a name for the consortium that’s trying to get back in the bidding process, but I have managed to get a few details.
The bidder has been reported to me as a consortium based in the western United States. They’re reported to be very serious players with a long term outlook and a genuine interest in developing Saab. The group was reportedly extremely well received by the team at Saab but their initial bid was seen as too low by Deutsche Bank, who are working on behalf of GM to find a buyer for Saab (more on that in a moment).
There is not much more that I can say about this group except that they are trying to get back in the game. Whether they have been successful in that, and whether they are the only ones trying to get back, I also don’t know.
With a description like that, though, I’d like to see them get back amongst the fray.
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Koenigsegg concerns
Something that popped up in comments here got me crunching some numbers today. Combine the results with some Djup Strupe whispers and it’s got me to the point of being concerned about Koenigsegg’s bid for Saab.
Koenigsegg reportedly sold around 20 vehicles last year. At a price between 750,000 and 1mil Euros per car, that means a ballpark figure of up to 20million Euros in revenue, at most, from automotive sales.
I’m not sure what other revenue streams K-Segg might have; maybe they do engineering work for others and I guess they might have some servicing revenue with an intense customer service focus, but at most you’re looking at revenues of less than 30million Euros in total.
My concerns are not whether Koenigsegg can scale up and take supervision of a mass producer. They only build a handful of cars at a time, but their construction method is one that is designed to be upscaled. And Saab management would still be Saab management.
My concerns, even with Bard Eker on board, are that their combined businesses just don’t make enough money for them to be adequately financing this bid. They must be the pretty face fronting for (a lot of) other people’s money.
The most worrying part is the Djup Strupe whispers that came through this week – that they might be having some trouble getting that money together.

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Djup Strup confirms bidders coming back to Saab

There have been some conflicting reports about this in the last 24 hours.
Yesterday, Jan-Ake Jonsson responded to the GM Bankruptcy filing and in an article covered by AFP on that response, he mentioned that a bidder was interested in re-entering the process.

When asked about the identity of a potential new owner, Jonsson said: “We have two that we are having serious discussions with and one that is interested in coming back into the process.”

TTELA then confirmed this was the case in a story by Magnus Nordberg.

Saab’s two final candidates have been three. This is then a stakeholder, previously screened away, come back with a better offer.
– They try to come into the picture again, “says Saab informationschef Eric Geer, and confirms that the two final candidates now been joined by a third.

14 hours ago, after the AFP and TTELA reports, Reuters came out saying that there are still only two bidders in the process, with no mention of the possible returning bidders.

General Motors Corp’ Saab Automobile unit has narrowed talks with potential buyers for the loss-making Swedish brand to two, Saab’s top executive was quoted as saying in a Swedish business daily on Tuesday.
“Now we are negotiating with just two parties,” Saab’s chief executive, Jan-Ake Jonsson, said in Dagens Industri.
Jonsson said final negotiations with one of those two potential suitors could start this week.
“This can go fast now and should absolutely be wrapped up in a maximum of two weeks,” he said in the report, adding a letter of intent with a “serious buyer” could be ready before mid-June.

So who’s right and who’s wrong?
I got on the phone tonight and got in touch with one of several Djup Strupes familiar with the situation and the answer is – all three.
Officially speaking, Saab still only have two bids on the table (Renco and Koenigsegg). But the implication in AFP and the story in TTELA are correct. Djup Strupe tells me that there may be either one or two parties who were previously involved in the process, had submitted lower bids, and were now looking to up their offer and get back in the game.
No identities were mentioned but a few were ruled out – any Chinese bidders and Fiat.
The time frame mentioned in the Reuters article was also mentioned to me as being accurate – an MoU within a few weeks and final signatures by the end of June (possibly pushing out to the first week in July).
Hopefully they’ll manage it a bit better than GM did with the Hummer announcement, where their intended secrecy lasted all of about three hours before the buyer’s name was leaked to the press.
Please name them straight away – and the sooner the better 🙂
——
As an addendum to this story, Auto Motor and Sport are running a story stating that Magna are not interested in Saab at this point in time.
Magna chief, Frank Stronach, stated that they’ve got enough to chew on at the moment with Opel, and that other companies are not on their horizon.

Saab’s prospective buyers qualify for EIB loans

TTELA are reporting a breaking story from Sweden, with Swedish Industry Ministry Secretary, Joran Hagglund, confirming that the state has met all prospective owners, and they have not seen anything that would deter the state from providing the promised loan guarantees.
Some Googltrans work from the original report:
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Representatives of the government have met the candidates remaining in Saab’s sales process. This has included discussions about state guarantees for loans from the European Investment Bank (EIB).
It is something that a future owner is supposed to be very interested.
– We have seen nothing that says that any of these stakeholders would not be considered for the EIB loan,” says Hagglund.
The Ministry of Industry gave a similar view on the Saab-process around 1-2 weeks ago. But when then Prime Minister Fredrik Reinfeldt at the weekend called Saab’s situation “very fragile and difficult”, it raised questions about whether the government had suddenly changed its view since the Opel affair has become clear, but without Saab as part of the package.
– It is perhaps how the image was conveyed. We have always agreed that the situation is vilnerable” says Hägglund on the Government’s vision, and continues:
– But only to the Saab 2-3 have stakeholders who are serious in itself is more positive than if it had not. Since there still remains some pieces,” he says.
Would the government have preferred a large settlement with Fiat as the new owner?
– Well, we noted that a fully independent company, would not, but it still requires partners. Then, it could perhaps be easier to put in a context where people can share their costs.
Even Jöran Hägglund heard on Monday, GM chief Fritz Henderson said that Saab is not affected by GM’s request for bankruptcy protection. It is the same information as the government earlier.
– Since you are never one hundred percent safe until the court says so. But most suggest that the process may continue.
Jöran Hägglund points out that there are a number of questions that should not be underestimated in terms of sales of Opel, in terms of rights, the supply of engines and components and so on.
– There it is important that all the countries involved continuous information. Some people compare with German and American government, and think that the Swedish government acted passively in this matter.
– In the case of the U.S. government, they started to grant loans around the turn of the year, which eventually forced them to become owners of GM. We did not want to end up in the situation, but that is exactly what would have happened if we left the loan guarantees in February.
– As for the Opel’s precisely what distinguishes itself from Saab. There has always been an owner (GM) who said they want to remain as owners.
——
This confirms the impression that we’ve received already, that the bidders we are down to now are serious contenders and legitimate candidates (at least in business terms. There are still some ethical queries to resolve).
If Koenigsegg and their connections satisfy the loan requirements and have a good proposition in place then I can see no better option from the parties that we know of so far.
All other things being equal, who would you prefer – K-Segg or Renco?
This is very encouraging news. Thanks to Tompa for the link and Magnus Nordberg for the excellent reportage once again.

On Koenigsegg buying Saab

I wrote last week of my opinion that the battle for Saab was basically down to Renco and Fiat.
That was before the Opel decision. And I think that Opel going to Magna basically takes Saab out of Sergio Marchionne’s calculations. Saab would have made a nice compliment to Opel if he’d got his hands on the German manufacturer. It would have given him a premium, though small-ish, dealership network in the US and some extra value in terms of cars that had tie-ins with other cars he’d be building already. Now it’d just be a whole lot of extra red-tape and negotiations for little extra margin, and that’s not what Serge is about.
I think Fiat’s most likely out of the game now. But that’s just my opinion.
So bar any epiphany that sees Deutsche Bank go back to previous bidders that might have been good for Saab, that would suggest that Saab is Renco’s for the taking. Renco have storm clouds hovering, though, and that’s as good a reason as any to hope that Dagens Industri were telling the truth last week when they said that Koenigsegg are working like a one-legged man in a butt-kicking contest to prove that they are a viable buyer for Saab.
So here’s a few thoughts about the whole issue about GM, selling Saab and selling Saab to Koenigsegg in particular.

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Some post-Opel analysis about Saab from Sweden

The ink probably isn’t even laid down on the Opel deal yet and the Swedish press are seeing it as a bad day for Saab.
ctm has provided the following reports; one a translation and one a summary of some general themes running through the media.
——
First, the following report from e24.se
Saab is a vulnerable prey. A sensible buyer must be selected if the brand is to survive long term. That excludes Koenigsegg and the environment vandal Ira Rennert. The speculation about who the three final bidders at Saab Automobile are goes on with great frenzy.
But let us reverse the argument: Who could be Saab’s dream buyer?
Those who with very high probability still remains in the picture are Fiat, the controversial American billionaire Ira Rennert through the Renco Group – whose main business is mining and metallurgical companies, where he has a documented bad environmental reputation – and the Swedish sports car manufacturer Koenigsegg, backed by a consortium of wealthy people. Just outside is where the parts-giant Magna, which yesterday signed a preliminary agreement to buy Opel, lies like the Old Maid. It appears that Chinese Geely is no longer in the running. So: who can save the heavily loss-making Saab for the long term?
The main criterion for a dream buyer can be summarized in two words: big bucks.
It is especially relevant in a situation where it is very uncertain whether or not Saab may write off debt at almost 1.3 Billion USD which they owe GM if GM is forced into bankruptcy. Can Saab write down the debts they still need about 1 Billion USD before they can show a positive cash flow in 2011, all according to the reorganization plan.
But that is probably not enough. Saab needs a higher volumes, fast. According to the reorganization plan Saab will sell 130,000 cars in 2011. But that does not mean long-term profitability. For that, Saab needs higher volumes.
These will not appear until the new and smaller 9-3 model. And that one is four, maybe five years away. That means even more money for development.
Then it is, to say the least, good to be part of a larger family and be able to share technologies and costs. The obvious would be to be in the same family as Opel, which they now share technologies and manufacturing lines with. Even the coming new 9-3 will share technologies with Opel.
Then Magna would be a good owner. Magna also has cooperation with the Russian Gaz and support from the Russian bank Sberbank.
Magna Russian partners has the added benefit of access to the important Russian market. The only problem is that Magna does not seem to be interested in Saab.
Both Koenigsegg and Ira Rennert, that in practice lacks both industrial and market opportunities, looks like bad alternatives in the long term – even if they in the short term would seem to be able to save Saab and get money from the Swedish Government and EIB loans.
Fiat had been an excellent partner – if they got Opel. But now their interest in Saab would be minimal – and the benefits of Saab for them is also small: Fiat is not in a position to invest in new models and in practice lacks market access in Asia.
But we do not know exactly what lures in the dark in Trollhättan. Maybe Saab has some other dream buyers tucked away, even if the chance appears minimal.
However, Saab took a small formal step on the chaotic path yesterday. Then they received information that they may continue their reconstruction to August 20. But in practice, they only continue until they run out of money sometime in the Summer.
——
And secondly, a summary of some thoughts running through the Swedish press today:
——
I can tell you that the comments in Swedish media today are not that optimistic about Saab after the Opel deal yesterday. The reasoning goes like this:
Fiat lost Opel and thereby Saab doesn’t matter for them any longer. They see no synergies in just getting a small plant in Sweden + a brand that somewhat have the same mojo as Alfa Romeo.
Magna got Opel and can’t afford Saab as well.
Swedish Govt. demand production to move to Sweden (from the Magna plant) in order to get financial aid. Is that what Magna really wants?
GM has said that they want to get rid of Saab. Magna is now in bed with GM. Why should they want a deal that keep Saab inside the GM-Magna-Opel sphere?
Opel is so much bigger and there operations is not as streamlined as Saabs. It costs so much more to run, and Opel is not a worldwide brand. Still, it only took weeks to have a new owner when the situation became desperate. Saab has been working for months to find a new owner.

Weekend snippets – a whole lotta nuttin going on

It’s the weekend here and there probably won’t be that much writing going on. It’s been another gruelling week with plenty to report on.
I’ll be spending most of my weekend looking up Mazda parts that I can’t afford and when I’m not doing that, I’ll be putting together an all-new site from scratch for my wife. She’s just started to sell some of her paintings and wants to put them online.
——
This time yesterday, Opel belonged to GM. Now there’s MOU’s being prepared to sell it to some Canadians.
How’s that for change?
——
Since Reuters picked up on the Koenigsegg news, stories of Saab’s suitors have spread around the ‘net like wildfire. It’s great to see Saab get so much positive press, though the web publisher in me is a little frustrated about that fact that we’ve been covering these bidders right from the get-go and Dagens gets all the links.
I don’t want or need the recognition, but the inward linkage from so many highly ranked sources would have been very good for the future of this site.
About those stories then…..
These are just a few. It’s great that the stories are so positive, but perhaps what’s even better is the goodwill in comments to those threads.
Just about any story to do with Saab over the last few years has been laced with anti-GM snickery. This makes for a very pleasant change, I think.
Jalopnik: Koenigsegg wants to buy Saab
Motor Trend: Chinese out, Koenigsegg in as a potential Saab suitor
Autoblog: Koenigsegg a finalist in bid to buy Saab
Autospies: Koenigsegg is top remaining bidder to buy Saab
Edmunds: From jets to jets? Koenigsegg may buy Saab
Autocar: Koenigsegg bidding for Saab
The Motor Report – Koenigsegg keen to keep Saab in Sweden
Leftlane News: Koenigsegg interested in purchasing Saab
Auto Evolution: Saab Battle Down to U.S. Billionaire Ira Rennert, Koenigsegg
EgmCarTech: Koenigsegg is bidding for GM’s Saab
The interesting thing is that whilst all these reports are pretty much based on the initial Reuters story, they all care about one thing – Koenigsegg.
That’s where the interest is here and it’s this interest that Saab could tap into from a marketing perspective and capitalise on.
I hope Koenigsegg are working their tails off to get their best bid possible on Deutsche Bank’s desk. They’ve got a heck of a lot of good will behind them.

Renco’s bid for Saab is now officially “news”

Saabs United – 9th May, 2009

Several sources have indicated to me that one of the US based bidders is a private investment company based in New York called The Renco Group, which is the parent company of AM General.

Reuters – 28th May, 2009

STOCKHOLM (Reuters) – Swedish luxury automaker Koenigsegg is among the remaining suitors of General Motors’ loss-making unit Saab Automobile, a Swedish business daily reported on Thursday, citing undisclosed sources.
The other front-runner for Saab, which was granted protection from creditors earlier this year, is U.S. financier Ira Rennert and his Renco Group, Dagens Industri reported on its website.

Will people now stop talking about Ripplewood?
Not likely, but I think this saves me from the threat of the nudie run, doesn’t it?
Some may have been watching the Swedish news services enough to know that they’ve been following SU’s commentary in the last few weeks, so in a way, some might say that Reuters may be quoting Dagens, who on odd occasions on this subject may have quoted me. So the logical next question is whether or not this is anything more than just me talking again through several filters?
Well, one would assume that a big service like Dagens or Reuters would do some further digging before committing to print. Me? I’m just a blogger with some excellent connections.

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