WRAPUP 3-Saab snapped up by Dutch company Spyker for $400 mln

* Deal ends months of uncertainty for Sweden’s Saab

* Spyker yet to make money but buys firm 30 times its size

* Will pay $74 mln in cash, $326 mln in deferred shares

* GM had been wary of selling Saab’s technology
(Adds Spyker comments, deal details, Saab losses)

By Johan Ahlander and David Bailey

STOCKHOLM/DETROIT, Jan 26 (BestGrowthStock) – Tiny Dutch auto group
Spyker (SPYKR.AS: ) clinched a last-minute deal on Tuesday to buy
Sweden’s Saab, in an audacious attempt to turn around a
money-losing brand that only days ago was headed for oblivion.

Spyker, a company that was liquidated in the 1920s only to
be reborn as a high-end sports car maker in 2000, said it would
pay General Motors [GM.UL] $74 million in cash and $326 million
in deferred shares for Saab.

GM confirmed the pending deal but did not provide details
of the transaction.

Saab, which has a devoted following among auto enthusiasts
taken with its distinctive, quirky style, has failed to make
money for much of the past two decades as GM was unable to find
a global audience for the cars.

But GM grew wary of selling Saab and its new designs for
fear of giving a potential rival a technological edge.

The irony of the David-and-Goliath deal was not lost on
Victor Muller, a 50-year-old former fashion executive who
engineered Spyker’s revival as its chief executive.

“Under normal circumstances, probably Saab would have been
buying Spyker,” an exhausted Muller told a news conference in
Stockholm. He said he had had no more than 15 hours sleep over
the past 5 days of marathon talks.

In a statement, Muller promised Spyker would respect the
“uniqueness, heritage and individuality” of the Saab brand.

The new group will become Saab Spyker Automobiles N.V.

Despite years of haemorrhaging money, the 60-year-old
Swedish company has many fans, some of whom believe it could be
profitable with the right owner.

“It’s a really brilliant brand. It’s probably one of the
biggest brand mismanagement stories in the history of the
automotive industry,” said Tim Urquhart, analyst at IHS Global
Insight.

“Saab could have been the Swedish Audi if it had been taken
on in the right way 20 years ago. It’s been completely
mismanaged, underinvested in by people who don’t understand
what the brand means, and what it has the potential to mean.”

A GM spokesperson wasn’t immediately available for
comment.

Whether the right owner is Spyker is open to question,
analysts say.

Spyker, which only produces several dozen handmade sports
cars a year, hopes to benefit from Saab’s technical resources
and distribution network. Saab will get funds to survive and an
injection of entrepreneurial spirit.

The market sensed a deal was in the offing on Monday,
bidding up Spyker shares as much as 80 percent before they
eased on Tuesday and then were halted in Amsterdam trading.

ONE THING IN COMMON

Spyker and Saab make for an odd couple. While Spyker
employs about 100 people who built 43 cars last year, Saab has
3,400 workers. Even at this week’s inflated prices, Spyker’s
market value is less than $85 million.

One thing the two companies have in common is an inability
to make money, which has made analysts sceptical of the plan.
Since the Dutch company was resurrected as a brand in 2000, it
has not made a profit.

Saab lost 400 million euros last year on sales of 1 billion
euros, Spyker said. The company slashed production by 77
percent to fewer than 21,000 cars in 2009 as the global
financial crisis put Saab’s survival in doubt.

The incentive to ditch Saab has long been clear as GM
sought to address its own pressing financial problems. But the
U.S. company was concerned about selling technology it has
shared with Saab and which powers many of its own models.

GM had already sold old Saab technology and machinery to
Chinese group BAIC, but Spyker was eager to get its hands on
the know-how behind Saab’s recently debuted 9-5 car series.

Spyker made its play after Koenigsegg — another tiny
luxury sports car maker — dropped its own bid for Saab last
November. Several companies competed with Spyker, including an
investment company backed by Formula One mogul Bernie
Ecclestone.

GM was on the verge of winding Saab down, a move that would
not only have killed the brand but also would have devastated
the southern Swedish town of Trollhattan, where Saab is based.

Muller traveled to Stockholm to hold exhaustive
negotiations on what he called a complicated, “extremely
technical” deal. His eventual journey to the Swedish capital
started when he revamped Spyker, a company that once built a
coach for the Dutch royal family but was liquidated in 1926.

Saab is seeking to borrow 400 million euros ($564 million)
from the European Investment Bank, a loan that Sweden announced
on Tuesday it would guarantee. Sweden said the EIB and European
Commission were still reviewing the loan.

For a related factbox, see [ID:nLDE60O12R]

For a Timeline on the deal, click [ID:nLDE60O15F]

For a Newsmaker on Spyker’s CEO, click [ID:nLDE5BL0DK]
(Writing by Adam Cox; additional reporting by Jui Chakrovorty
in New York, Reed Stevenson in Amsterdam, Helen Massy Beresford
in Paris, and Oskar von Bahr, Mia Shanley and Niklas Pollard in
Stockholm; editing by Will Waterman and Carol Bishopric)

Stock Market Basics

($1=.7097 Euro)

WRAPUP 3-Saab snapped up by Dutch company Spyker for $400 mln