Financial News

  • 17 January 2014, 7:25

1bn Bidding War Erupts For Car-Parts Giant

A car-parts maker that includes most of the world's biggest automotive marques is at the centre of a 1bn private equity bidding war.

Sky News has learnt that Pamplona Capital Management, a London-based buyout fund, this week tabled an offer for TI Automotive, a privately-owned group that was founded nearly a century ago in Birmingham.

Pamplona's offer, thought to be worth more than 1bn, follows detailed negotiations between TI's owners and Bain Capital about a deal towards the end of last year.

Those talks were said to be likely to result in a takeover of TI, but an apparent impasse has left the door open for other bidders to emerge.

TI's shareholders are a group of hedge funds led by Oaktree, which took control of the car-parts manufacturer in 2009 after it stumbled into financial difficulty and had to be rescued by its lenders.

The company remains one of the biggest players globally in automotive parts, employing the best part of 20,000 people and providing fuel-tank systems for manufacturers such as Mercedes-Benz and other parts for Audi, Volkswagen, Seat and Skoda.

The hedge funds' search for a new owner follows a two-year turnaround plan implemented in 2009 after TI hit financial trouble and had to be bailed out by its lenders.

This week's offer is not the first time that Pamplona and Bain have contested an auction of TI. The pair also submitted bids in 2011, as did Carlyle, another private equity firm.

More recently, Cerberus, another financial investor, and a Chinese automotive group have also considered making offers for TI, which notched up 2bn in sales in 2012.

Deutsche Bank and JP Morgan are understood to be advising on the sale.

Pamplona declined to comment.

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