Swedish Automobile, owner of Saab, has turned down a takeover offer from China’s Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co.
Youngman and Pa Dang signed a nonbinding memorandum in July to take a combined 53.9 percent stake in Swedish Automobile for about $338 million.
Instead, the two Chinese companies made an offer for a direct purchase of shares in Saab on Friday. They say because circumstances have changed since July, so should the deal. Swedish Automobile declined the offer and asked Youngman and Pa Dang to honor the original agreement.
According to Swedish Automobile CEO Victor Muller, “The token offer was unacceptable because it would trigger every conceivable change of control clause and that would possibly mean the end of Saab.”
Muller also said there was a plan B, if the Chinese investors fell through, though he declined to reveal it.
At the same time, there is still hope for Saab. U.S. private-equity company North Street Capital promised the brand $70 million. But attorney Guy Lofalk, the administrator in charge of Saab’s case, says that amount was far from enough to continue reorganization. He asked the Swedish courts to lift the bankruptcy protection. They are set to decide on Oct. 28.
By: Jake Lingeman on 10/21/2011