Honda F1 website

AUGUST 24, 2006

Ford to go private?

The giant Ford Motor Company is reported to be considering going private in order to buy time to restructure its ailing automobile business. Ford's share price is currently $7.75 which means that the cost of going private could be as little as $13.3bn. The Ford family still controls 40% of the company but restructuring is taking longer than planned because of the drop in sales of pick-up trucks because of the rising price of fuel. There has been talk in recent weeks of selling off a number of its brands, notably Jaguar, Volvo and Aston Martin.

Going private would mean that the firm could make swift decisions without having to fight with its own shareholders which would help the firm solve its problems. There is no doubt that the current share price does not reflect the true value of the company, which should be trading at four or five times the price.