Manganese Bronze moves to quash takeover rumours
SPECUALTION mounted today that Coventry based taxi maker Manganese Bronze could be on the verge of being bought out by its Chinese joint partner.
Shares in the firm soared more than 30% yesterday on rumours Geely Automotive may be about to make a move.
However, Manganese Bronze distanced itself from the situation today saying it was not in takeover talks with the Chinese firm.
In an interim management statement today, the firm said: “In the light of yesterday’s comments in the press, the board wishes to confirm that it is not currently in discussions with Geely regarding any proposed placing or offer for the Group but we continue to maintain an open and constructive dialogue with Geely.”
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Geely, which gave a hint of its ambitions earlier this year by buying Swedish car maker Volvo from Ford, has been working with Manganese Bronze for some time on a version of its iconic black cab for Asian markets.
Manganese Bronze, eager to reduce production costs on the vehicle, switched manufacturing to Chinese plants in the summer with its Coventry base becoming an assembly operation.
The parent company had also been trying to persuade Geely to increase its stake in the firm in an attempt to fund growth measures. Although seemingly in favour of the deal – which would have seen Geely become Manganese Bronze’s main shareholder – the Chinese later pulled out of the move.
Suggestions were that Geely, which has around a 20% stake in Manganese Bronze, was ready to offer around 35p a share for the business. It is thought the company may want to tie up the deal before David Cameron visits China next month.
Manganese Bronze incurred a £7.3m loss in 2009 and earlier this year issued a profits warning because of poor sales.
If Geely is hoping to secure the business for a song it will have been disappointed by latest sales figures which show UK volumes picking up during the third quarter.
In its statement, which covers the period July 1 to October 20, Manganese said UK sales for the third quarter were up 11% on the same period last year at 466 vehicles (Q3 2009: 420 vehicles). The firm said this was particularly encouraging as 2009 sales were boosted by the favourable impact of the scrappage scheme.
The Q3 performance was broadly in line with expectations, said the firm.
On global sales, it said there was still strong interest in the TX4 but the adverse economic conditions continued to restrict the availability of finance to potential customers.
It said Q3 overseas sales at 78 vehicles, were up 67 vehicles on 2009 and earnings were now being positively impacted by restructuring measures, which include the closure of the North American business, UK cost savings, the move to a UK assembly-only operation, restructuring of the UK dealer network, the Chinese supply of parts and TX4 international sales.
