GM Could Wait to Decide Saab's Future

Though General Motors is closing its Swedish Saab unit, the automaker is being flexible about a Dec. 31 deadline for takeover bids in hopes of selling the business

By Ola Kinnander

(Bloomberg) — General Motors Co. is prepared to wait beyond the end of this week before deciding on the future of the Saab brand as it reviews remaining bids, according to Paul Aakerlund, a board member at the Swedish carmaker.

GM told Saab last week that it would wind down the unit and simultaneously continue talks with bidders about a sale, said Aakerlund, who also heads the IF Metall union at Saab. Negotiations to sell Saab to Spyker Cars NV (SPYKR:NA) collapsed Dec. 18 and Spyker Chief Executive Officer Victor Muller blamed the failed deal partly on a "strict deadline" for an agreement by Dec. 31. The Dutch carmaker submitted a new offer on Dec. 20.

"It's our understanding that if there's a bid that GM finds sufficiently interesting, then the 31st of December is not a date that's holy," Aakerlund said in a phone interview today.

Some 3,500 Saab jobs are at risk, along with thousands of positions among suppliers to the automotive industry in Sweden. Two attempts to sell the 72-year-old brand failed in the past five weeks and since then GM has said it received inquiries from "several parties." The brand is among four being sold or shut as GM focuses on Chevrolet, Buick, GMC, and Cadillac after its July 10 bankruptcy exit.

GM's position hasn't changed since its Dec. 18 statement, Chris Preuss, a company spokesman in Detroit, said yesterday. "We are winding down Saab and talking with interested parties as part of that process. We will not comment further," he said in an e-mail.

Merbanco, Spyker

Talks with GM are now focusing on two suitors: Merbanco Inc., the Wyoming-based group that revised its bid after bringing in Swedish investors, and Zeewolde, Netherlands-based Spyker, according to two people familiar with the matter who asked not to be identified because the discussions are private.

Merbanco President Chris Johnston declined to comment.

CEO Muller said it's difficult to evaluate Spyker's chances, or predict whether GM will shut down or sell Saab. "We were the frontrunner the week before last, but today I wouldn't make that claim," he said in a phone interview.

Spyker rose 30 cents, or 16 percent, to 2.17 euros in Amsterdam trading, valuing the luxury carmaker at 46.5 million euros ($66.7 million).

"It is a high-risk situation," said Michael Robinet, an analyst at consultant CSM Worldwide Inc. in Northville, Michigan. "Given the movement of the assets and the discontinuance of support from GM, it would be difficult to continue business even resembling what it used to."

Twice Failed

The failure of GM's initial talks with Spyker marked the second time efforts faltered to sell Saab. Swedish sports-car maker Koenigsegg Group AB, which had backing from Beijing Automotive Industry Holding Co., walked away from a deal last month. Beijing Auto paid $200 million to buy technology from Saab to use in its own cars.

Ford Motor Co. (F), which didn't join GM and Chrysler Group LLC in declaring bankruptcy and taking a U.S. bailout, said last week that it agreed with China's Zhejiang Geely Holding Group Co. on most terms for a sale of the Volvo Car Corp. unit, which is also based in Sweden.

Merbanco was one of the final three bidders for Saab in June, when GM decided to go with Koenigsegg, people familiar with the situation have said.

"They're working with the bids they've received for Saab," Aakerlund said today. "Spyker and others are very willing to buy Saab, so we're still hoping for that solution."

Saab hasn't started the wind-down process, Aakerlund said. Saab's factory in Trollhaettan is closed for the holidays and is scheduled to reopen Jan. 11.

"We still haven't received any clear instructions about what a wind-down would entail," Aakerlund said. "It's far from certain they will say anything the next few days."

To contact the reporter on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net.

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