NEW YORK TIMES
By STEVEN PROKESCH, Special to The New York Times
Paving the way for an all-out fight between the General Motors Corporation and the Ford Motor Company for Jaguar P.L.C., the British Government said today that it was willing to lift a restriction barring anyone from buying more than 15 percent of Jaguar’s shares until the end of the next year.
Nicholas Ridley, Secretary of State for Trade and Industry, said the Conservative Government would remove the restriction as soon as holders of at least 75 percent of Jaguar’s shares voted to amend the luxury car maker’s articles of association, which include a similar restriction.
The move, which surprised Jaguar, seemed to be rooted in the Government’s belief that the market, and not the Government, should decide business matters. Distortions Cited
Mr. Ridley said the curbs ”are now clearly causing uncertainties about the company’s future by prompting speculation over how my powers might be exercised, so distorting the basis on which all parties involved have to reach their decisions.”
He added, ”It is in the best interests of Jaguar’s management, shareholders and work force for the company’s future to be assured and the present climate of uncertainty resolved as quickly as possible.”
The price of Jaguar’s shares on the London Stock Exchange soared in response. They were trading at $:7.46 ($11.77) when trading was suspended pending the announcement. When trading resumed, the price rose as high as $:9 before closing at $:8.69. That would give the company a value of $2.5 billion. Need to Bid Seen
With the Government willing to remove the curb, imposed when the formerly state-owned company was turned over to the private sector in 1984, G.M. will probably have to bid for control of Jaguar, analysts said.
Ford has said that it bought 13.2 percent of Jaguar’s shares since mid-September. It is believed to have paid an average of about $:6.75 a share, or a total of about $257 million. Some analysts believe that Ford, which has stated that it intends to buy up to 15 percent and was prepared to bid for the whole company, also made more purchases today. G.M. is not believed to own much Jaguar stock.
Jaguar has made it clear that it prefers G.M. The two have been in the final stages of negotiations, and Sir John Egan, Jaguar’s chairman, has said he hopes to be able to announce a deal within a few weeks.
British newspapers have reported that the plan under discussion calls for G.M. to invest about $800 million for an initial stake of about 15 percent and then increase that to 25 to 30 percent. The two companies have reportedly been discussing several cooperative ventures, including manufacturing a high-volume luxury car and joint production of a V-6 engine.
Ford is believed to be similarly interested in producing a high-volume car under the Jaguar nameplate that would sell for $30,000 to $40,000.
Jaguar produced only about 52,000 cars last year. Its least expensive model, a sedan that was recently introduced, sells for about $39,700 in the United States. Its most expensive model, the XJS convertible, is priced at about $57,000.
Like other European makers of luxury cars, Jaguar has been having trouble in the important American market. It barely broke even in the first half of this year, and has been interested in forging an alliance to strengthen it financially.
On Sunday, Edzard Reuter, chairman of Daimler-Benz A.G., disclosed that the West German company had also been holding talks with Jaguar about possible joint ventures. But analysts said today that no other car makers would be willing to get into a bidding war with Ford and G.M. $2.76 Billion Price Seen ”It’s not the Japanese style to come into this sort of situation, and there is no one in Europe who is prepared to pay that much for Jaguar,” said Bob Barber, an analyst at James Capel & Company in London. He predicted that Jaguar could ultimately be sold for $2.76 billion and that Ford or G.M. might then invest an additional $1.2 billion to produce a high-volume car.
Ford had no comment on today’s development. In a statement, G.M. said the ”intensive discussions” it has held with Jaguar ”at their invitation” over the last nine months ”have as their objective to create a cooperative business relationship with Jaguar that would provide for the continued independence of this great British car company.”
Sir John, Jaguar’s chairman, said: ”We were not consulted in the matter in advance and were surprised at the action taken.”