Monday, March 31, 2008
Investor concerns rise over Tata deal
Investors in Tata Motors are concerned the Indian carmaker will be forced to offload some of its subsidiaries to finance its £1.15bn acquisition of Jaguar and Land Rover from Ford.
The completion of the deal this week initially forced down Tata’s share price by 7.3 per cent before it recovered to finish 3.6 per cent down yesterday at £8.21p.
According to the Financial Times, investment bank Credit Suisse said Tata was likely relinquish its holding in Tata Steel, India’s largest private steelmaker, which is worth about £225m.
Investors have reacted warily to Tata’s interest in Jaguar and Land Rover since it emerged as a leading bidder in mid-2007.
Tata Motor’s stock has dropped by about 13 per cent since July last year.
Investors are concerned that Jaguar is loss making, the market for luxury cars in the US is declining and the brands do not match India’s market for budget cars.
DATED: 31.03.08
FEED: MT
