Investors encourage Proton to sell Lotus

[Iconic Ride]

With the Malaysian government's 42.7% interest in Proton now transferred to DRB-Hicom, an entity with apparently deep pockets and substantial prior automotive experience, what's not to like? Bahar can stay or go, Lopez can continue to work behind the scenes and/or assume a more visible influence (and management position?) on the future of Lotus, both Group and F1, at his convenience. The "two year" restrictions are a sensible way to maintain stability and smooth the transition, but like anything else in a "contract," they can be ammended if necessary.

Nonetheless, it will be interesting to see to what extent Genii itself is incorporated into the picture.

[NedaSay]

Proton Berhad (including Lotus) was valued 400M $! How much is Group Lotus worth?

Edited January 16, 2012 by NedaSay

[BrazierD]

Proton Berhad (including Lotus) was valued 400M $! How much is Group Lotus worth?

Depends whether the buyer is taking on liability for the $400M loan?!

[Exploded]

Depends whether the buyer is taking on liability for the $400M loan?!

Made smile as well, so somebody bought a big part of Proton, worth $410 million, including Group Lotus. And Proton took a loan of $400 million a year ago, which is the amount money they are only worth as a whole... Crazy...

[Trevsked]

Not sure if this has been covered in another topic but......... lifted from another forum.

Lotus's parent company, Proton, has been sold to industrial conglomerate DRB-Hicom, with the Malaysian government offloading its 43 per cent stake in the company for £268m.

That's a deal which values Proton at 24 times its estimated earnings for the next 12 months, against an average multiplier of 13 for Asian car manufacturers. It gives DRB two car plants with a combined capacity of 350,000, and has obvious potential benefits for a company that already assembles and distributes vehicles for Daimler and Volkswagen.

But what it means for Lotus is a rather different matter - Lotus hasn't made a profit since Proton acquired it in 1996, and DRB might simply see the British sports car manufacturer as a minus figure on the company's balance sheet. Especially since analysts have been advising Proton to offload Lotus for a little while now...

Trevor.

Another link.

http://www.autoguide.com/auto-news/2012/01/lotus-parent-proton-sold-to-private-conglomerate-drb-hicom.html

Trevor.

[Kimbers]

Made smile as well, so somebody bought a big part of Proton, worth $410 million, including Group Lotus. And Proton took a loan of $400 million a year ago, which is the amount money they are only worth as a whole... Crazy...

The sum of the parts outweight the sum of the total Gert. The worry is that the buying company does just that and sell all the seperate entities off individually. They won't care because they are in it for the money.

I'd like to see Lotus bought by a true enthusiast or a company who wants it for long term investment rather than short term profit.

[Gus82]

Well the news is........

There is no news!!!

http://www.autocar.co.uk/News/NewsArticle/AllCars/260929/

Seems the statement says there is no change! Of course I still suspect that some part of Lotus is now owned by Mr Bahar and Genii and that the rest will be sold in two years time, but it does allow enough time for the Esprit and possibly the Elite to be launched properly and the Lotus Racing programmes and merchandising to add to the value of the brand.

So all is good!

I think Mr Lopez might be a good future majority stakeholder if he can raise enough cash to buy a large chunk of the company, he came across as a genuine car enthusiast in that recent Evo article. My own preference would be for Lotus to be funded by a number of different companies, investment funds and individuals in future like McLaren. That way if one runs into trouble a replacement is easier to find and less disruptive.

[Exploded]

The sum of the parts outweight the sum of the total Gert. The worry is that the buying company does just that and sell all the seperate entities off individually. They won't care because they are in it for the money.

I'd like to see Lotus bought by a true enthusiast or a company who wants it for long term investment rather than short term profit.

Well you just summed up everything Genii does not stand for... they are quite opposite actually.

[Gus82]

Is the plot thickening.....

http://www.bernama.c...s.php?id=640674

I'm sure Joe Sawards blog at some point talked about Genii speaking to other Malaysian investors.....

Could it be that he has just bought Lotus, with some pesky budget car brand attached, and he might want to use the Malaysian factories to assemble cars for other manufacturers?

Edited January 17, 2012 by Gus82

[NedaSay]

as expected! the new owner is better off letting the game go forward! Especially if Lotus can return to high profitability within the realm of DB's plan! The owner pretty much got Lotus for free!!! If he sells it in two or three years it may really be a great coup!

[Exploded]

DRB-Hicom Is Open to Selling Lotus

KUALA LUMPUR—Malaysian conglomerate DRB-Hicom Bhd. is open to selling Proton Holdings Bhd.'s British sports-car unit, Lotus, as it seeks to turn around the car maker's performance, DRB-Hicom Group Managing Director Mohd. Khamil Jamil said Wednesday.

"Options are open. At this particular moment, I'm open to sell or not to sell Lotus," Mr. Mohd. Khamil said at a news conference.

DRB-Hicom said Monday that it agreed to buy a 42.74% stake in Proton Holdings for 1.291 billion ringgit ($413.1 million), after it won the bidding to gain control of the Southeast Asian nation's second-biggest car maker by volume, after privately held Perodua.

DRB-Hicom, owned by Malaysian billionaire Syed Mokhtar Albukhary, will pay 5.50 ringgit a share to state investment firm Khazanah Nasional Bhd. for the stake, and will make a general offer for the remaining shares at the same price.

Proton Holdings has been suffering financially over the past few quarters, primarily because of higher expenses at Lotus. The company has been restructuring operations at Lotus Group International Ltd. and spending heavily on branding to improve performance at the British car maker. Proton Holdings' net profit for the second-quarter ended Sept. 30 declined 76% from a year earlier to 15.6 million ringgit.

Mr. Mohd. Khamil also said the company was in "exploratory" talks with its foreign partners over a possible collaboration involving Proton Holdings.

DRB-Hicom, an automobile, financial-services and construction company, has a partnership with Volkswagen AG and assembles and distributes vehicles for Volkswagen, Daimler AG's Mercedes-Benz, Honda Motor Co., Isuzu Motors Ltd. and Suzuki Motor Corp.

"In terms of foreign partners, I've opened up my options to collaborations, joint ventures and technical assistance with all my partners," he said.

Analysts have said the best way for Proton Holdings to deliver consistent profits would be a partnership with a global original equipment manufacturer, as that would help the company gain local market share and possibly expand its presence in regional markets.

Mr. Mohd. Khamil also said DRB-Hicom intends to keep Proton Holdings privately held once its buyout of the auto maker is successful. "I don't sell companies and it's not in my plans to dispose any equities shareholdings in Proton. On paper right now, our plan is to take the company private," he said.

DRB-Hicom on Tuesday bought an additional 7.3% stake in the national car maker via the open market at prices ranging between 5.40 ringgit and 5.47 ringgit a share, according to a DRB-Hicom stock exchange filing.

Source

[Gus82]

Well that kills off my theory! Sounds like they are only interested in selling at the right price.

Joe Saward has another piece now saying that Genii carried out due diligence at Lotus in the Autumn and was trying to raise funds, though it is not clear if this has been successful.... As nothing was announced yesterday I suspect they don't have the money for a full takeover or perhaps they have had to wait to negotiate with the new owner?

[Bibs]

What isn't for sale at the right price?

[Exploded]

What isn't for sale at the right price?

For I don't care too much for money

For money can't buy me love

:D

[Gus82]

What isn't for sale at the right price?

Very true!

Another interesting little addition has been added by Joe Saward in the comments section after his last Lotus blog:

"I have been doing some research since the announcement and it seems that the Lopez bid for Proton/Proton was finally rejected, which explains what has now happened. This is not such good news for Lotus F1 Team because the new owner of Proton clearly does not want Group Lotus, as it has in effect asked for bids. Any new owner may also NOT want to spend the kind of money on F1 that Group Lotus in its current form has signed to invest over the next few years and might – if the F1 contract is watertight – mean that buyers would be put off, unless they see F1 as a way to sell more cars. Their goal (unless they have very deep pockets) will be to make the company profitable as quickly as possible, and rather than spending bucket-loads as the current management is doing, they might decide to cut bucket-loads instead. Again, time will tell."

Obviously it all just assumptions regarding budget cuts etc. but it is interesting to read about the Lopez situation. Who knows if he will be able to raise more cash once the Esprit has been released and the success of the "new era" plan is more easily quantified.

[Iconic Ride]

What isn't for sale at the right price?

My dog. The wife, maybe. But not the dog.

(just kidding, honey, you can put the pan down now)

Is it just coincidence that the additional (7.3%) shares of Proton purchased by DRB-Hicom on the open market Tuesday brought their total ownership percentage to 50.04%, or merely a function of being able to procure those shares at slightly less than the 5.50 ringgit standing "general offer?"

[Billy111S]

My understanding is that Genii were involved (investment management & financial advise) in the negotiations with DRB-Hicom to aquire the Proton majority stake.

If that is the case, wouldn't you have thought that after the buyout, all of the eventualities would have already been mapped out?

Genii had apparently carried out due diligence of Group Lotus towards the end of last year. If that information was made avaliable prior to the acquisition, why are DRB-Hicom now questioning whether to keep Group Lotus or sell it?

Maybe my understanding of Genii in this process is off cue, but it doesn't make sense to me.

Sorry. So many questions I know.

[Iconic Ride]

This will all become clear when Putin makes his move.

[DarrylV8]

About 10K per member would make an interesting offer.

*Invest.

What's your beef with Claudio Berro, Wolf Zimmermann, Donato Coco, Bob Lutz, Tom Purves, Karl Kalbfell, Gordon Murray et al?

Bibs,

How many members are there? We would be up for £10K

[richardvg]

My understanding is that they will all tell you what they want you to hear.

When i come back (next time round) i wish to be a spin doctor !!!!

[Billy111S]

My understanding is that they will all tell you what they want you to hear.

Yes quite true. In the end of the day is it really worth caring?

[Iconic Ride]

Only if you want parts for your car 10 years from now.

[Kimbers]

Well they need to sort things out soon, because all this speculation, no matter whether its true or not is bad for business! Not only in selling cars but for suppliers who are worried about being paid, dealers who want to hold on to the Franchise and 1200 employees many of whom are extremely worried.

[OwenGT3]

Piece on ITV Anglia News tonight speculating Lotus might be sold off by the buyers if the long term investment plan doesn't look viable. The news clip seemed bias to thats what the decision might come to as they mentioned finding a brand enthusiast investor for Lotus.

http://www.itv.com/a...otus-cars72623/

Perhaps time to give Tony Fernandes a ring? How ironic if he ended up being DB's boss.

Edited January 20, 2012 by OwenGT3

[NedaSay]

Bibs, How many members are there? We would be up for £10K

Hum... Really thinking about becoming a Group Lotus shareholder! That'd be incredible! I wonder what is the exact market value of Group right now?

Edited January 20, 2012 by NedaSay