Rolls-Royce, Anyone?

It looked like the ultimate humiliation for Rolls-Royce Motors Ltd. In late March, the famous company was put on the auction block--and last week it developed that nobody wanted to buy it at a price acceptable to Bankruptcy Receiver Edward Rupert Nicholson. He had asked companies interested in purchasing Rolls to submit sealed bids, which were opened last week. No foreign company made a bid, because the British government would not have let a foreign purchaser use the Rolls-Royce name. Ten British bids were received, but all were below the $120 million or so that London financiers once estimated Rolls-Royce might fetch. Nicholson and his bank rejected the bids and announced that this week they would offer Rolls-Royce's stock to the public at a total price of around $96 million.

That is reputed to be only a wee bit above the highest bid--all of which has led some bankers to suspect that the government favored the public offering all along, and went through the motions of conducting an auction only to demonstrate that it was getting the highest possible price. The stock offering, which will enable Rolls-Royce to continue as an independent company, is highly popular with the British public; some 200 London investment groups have lined up for a piece of the stock. Creditors of the old Rolls-Royce Ltd., which went bust in 1971, may be less pleased. They will get the proceeds from the stock sale, but those will fall far short of clearing the $300-odd million in debts that the company ran up building advanced-design aircraft engines. Payment of the rest will have to await a settlement from the British government, which nationalized the jet-engine operation.

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