German carmaker BMW AG's shares jumped 3 per cent yesterday as speculation that the industry's biggest producer, General Motors Corp, is considering a takeover ignored BMW statements that it was not up for sale. BMW shares have been swept along by a tide of rumours and reports since February 5th - when it appointed Mr Joachim Milberg as its new chairman - that it could surrender eight decades of independence by agreeing to an alliance with a larger rival.
While BMW has issued a string of statements reiterating it is not considering a tie-up and its major shareholder, the Quandt family, has expressed steadfast commitment to the company, BMW shares continued to surge on takeover speculation.
Yesterday, BMW shares closed electronic trading 3 per cent higher at 745.70 euros, while the benchmark Xetra DAX index fell 0.16 per cent to 4,888.95 points.
"They (BMW) can say five days a week that they want to remain independent and then a paper will come along and say the opposite," Munich-based HypoVereinsbank AG analyst Mr Georg Stuerzer said.
"But without the Quandt family nothing can happen and at the moment it does not look like they are going to change their position," he added. The Quandt dynasty owns an estimated 45 per cent of the company's shares.
Monday's latest bout of BMW share buying was sparked by a report in German newspaper Die Welt at the weekend that General Motors (GM) was considering a takeover of BMW.
The newspaper said GM was likely to make a bid for BMW in coming days, while news magazine Der Spiegel reported that Volkswagen was also vying to forge links with BMW, including the takeover of BMW's loss-making British subsidiary, Rover.
Mr Milberg at the weekend rebuffed speculation his company was ripe for takeover. "BMW is independent, and will stay independent," a company spokesman said, quoting Mr Milberg.
The Quandt family also reiterated their four decade long support for the Bavarian firm.
"It's a tiresome debate," HypoVereinsbank's Mr Stuerzer said. "It will keep cropping up in the press and I am just interested to see for how long the share price will keep reacting."
VW and GM are not alone in their reported interest in BMW. Ford Motor Co, Fiat and Toyota Motor Corp have also been tipped by analysts as likely bidders.
"Every big producer with cash could make an offer for BMW. I think almost all of them, with the exception of DaimlerChrysler will make an offer," said Frankfurt-based DG Bank auto analyst Ms Alice Kytka.
While Rover's failure to turn a profit since BMW acquired it in 1994 has become BMW's Achilles heel, its other car businesses remain extremely profitable, she said.
With BMW expected to redouble efforts to turn around Rover, the company may not rule out co-operation with a larger producer to build a greater volume of Rover cars on the platform of the bigger rival, analysts said.
