LONDON (Dow Jones/AP) — Ford Motor Co.'s top executives are evaluating six bids received for its Jaguar and Land Rover units, people familiar with the situation told Dow Jones Newswires Thursday.
The company expects to whittle the bids to one or two within the next week or so, following detailed talks which will start in the next few days, according to people who were briefed on the bidding process. They requested anonymity due to the sensitive nature of the proceedings.
Shortlisted bidders will be asked to submit binding offers.
Only one trade buyer, Tata Motors Ltd. India's largest auto maker, put in a second-round bid.
The other second-round bids came from private equity bidders including TPG Inc.; Ripplewood Holdings LLC; One Equity Partners, a unit of J.P. Morgan Chase & Co. and Terra Firma Capital Partners, these people said.
One other buyout shop has also submitted a bid but the identity of the fund is unclear.
Previously interested Cerberus Capital Management, which recently bought an 80.1 percent stake in DaimlerChrysler AG's Chrysler Group, had cooled on the deal, one person said.
Ford is selling the brands, part of the company's Premier Automotive Group, or PAG, to concentrate on growing its core business in the U.S. market.
It sold luxury sports car business Aston Martin, also part of PAG, earlier this year for $931 million.
Analysts have valued the Land Rover and Jaguar units at around $8.2 billion based on last year's sales figures, but that doesn't take liabilities into account.
''Jaguar is worth around $2.5 billion and Land Rover $5.7 billion, but this is without debt and not allowing for the (capital expenditures) required to modernize production plants,'' said Nomura analyst Michael Tyndall.
In addition to price, Ford will have to deal with the conditional nature of the bids, which center around Ford's continuing interest in the units as a supplier to the new owner and the possibility of its retaining a financial stake.
The latter would assist private equity buyers who have been looking for alternative ways of funding acquisitions while banks remain reluctant to provide new debt financing for leveraged buyouts.
Some, but not all, of the bidders already have financing in place, one person said.
The company hired Goldman Sachs Group and Morgan Stanley to run the auction in June. It expects to complete the process by the end of this year or the beginning of next.
Shares of Dearborn, Mich.-based Ford fell 13 cents, or 1.5 percent, to $8.74 Thursday.
