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Rover/Honda: Conflicting Stories Surface Again

14 May 2000

Phoenix claims Honda will take a 49% share in Rover - Honda Rules Out 
Interest in Rover

    London - Even before a deal was struck between BMW and the Phoenix 
Consortium to rescue Rover, there were rumors and denials about a possible 
deal between Phoenix and Honda.  This weekend two contradictory stories add 
more fuel to the fires of doubt.

    On the one side, The Sunday Times of London has reported that Phoenix is 
offering to sell up to 49% of the Rover group to
Honda within three years. The story states that if Honda agrees to a deal, 
it would at first allow the new grant Rover access to its technological and 
design expertise for two or three years.  Honda would then have rights to 
acquire up to 49% of the Rover.

    The deal is said to be similar to a proposal that John Towers, the Phoenix 
front man and former Rover CEO, tried to put together with Honda in1964, 
before BMW bought the Rover group.

    Conversely, in a report out of Tokyo, Koichi Amemiya, executive vice 
president of Honda, said, "We have not received any official request to 
co-operate (with Rover).  Even if we had, we are not in any position to 
provide help to others since we ourselves are in the red in Europe."  Mr. 
Amemiya stressed that although Honda is committed to success in the UK, a 
deal with Rover was not in the offing.

    Responding to the Honda statement, a Phoenix source said that despite 
Honda's denials, they have been in secret talks with them, and have been 
for some time.


MJR