Eicher set to make $1.8 billion-$2 billion binding bid for Ducati - paper
India`s Eicher Motors is set to make a $1.8 billion-$2 billion bid for Italian motorcycle manufacturer Ducati, the Economic Times daily reported on Thursday, although the sale of the brand by German owner Volkswagen remains in limbo.
Volkswagen, which put Ducati up for sale in April, wants to sell the 91-year old business to fund its strategic review in the wake of the emissions scandal.
Mumbai-based Eicher, which makes Royal Enfield motorbikes, is believed to be the only Asian firm left in the auction and is currently finalising terms ahead of the bid deadline of end-September, the newspaper said, quoting unnamed sources. (http://bit.ly/2eHOiI5)
Sources familiar with the auction, however, told Reuters earlier this week that Volkswagen had put the sale on hold after resistance from German trade unions and internal rifts over strategy.
The sources said VW had told five bidders to hold off making binding bids for the motorbike brand based in the northern Italian city of Bologna.
Ducati is wholly controlled by VW`s Audi division.. Audi`s Ingolstadt, Germany-based headquarters declined comment, as did parent VW.
Eicher, whose shares reached a record high on Thursday, could not immediately be reached for comment.
Sources close to labour representatives at Audi and VW, said on Thursday that trade unions remain opposed to selling Ducati.
Unions are keen to avoid disruptions in the workforce ahead of next year`s works council elections at VW, two sources said. Separately, despite the growing costs for the diesel emissions scandal and shift to electric cars, they believe there is no financial need for VW and Audi to sell Ducati given the group`s strong financial results.
Meanwhile, Eicher shares were up 3.4 percent at around 0900 GMT after earlier rising as much as 3.9 pct on the bid report.
The Eicher Group designs, develops and manufactures trucks buses and motorcycles and their components.
The stock was among the top percentage gainers in the main index .
"Ducati being a well-renowned brand will help Eicher in terms of design and technology, which in turn will help expand the Royal Enfield product portfolio in the years to come," said Basudeb Banerjee, analyst at Mumbai`s Antique Stockbroking.
Sources had earlier told Reuters that U.S. motorcycle maker Harley-Davidson and India`s Bajaj Auto Ltd were among companies also preparing bids for Ducati.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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