Outlook: A nasty dent for Mayflower

When investment banks are on the block and looking for the best price, there is always a danger they will overstretch themselves in their determination to prove their worth. Such appears to have been BZW's fate in advising Mayflower on the bid that never was for Vickers. BMW's decision to bring proceedings to a grinding halt by threatening to stop making engines for Rolls-Royce has left considerable egg on face. The more serious damage, however, appears to be to the reputation of Mayflower's chief executive, John Simpson, who suddenly begins to look mortal.

Despite BMW's soothing words last night, it is hard to see how Mayflower can reverse out of this tight space without a nasty dent, having antagonised its two biggest customers in the space of a fortnight.

Mayflower appears to have thought it had obtained the tacit approval of BMW to proceed with its bid, or at least an understanding that the German car maker would remain neutral. Sadly, something appears to have been lost in the translation. BMW is itself intent on adding Rolls to its collection of faded British motoring marques.

If Mr Simpson and Mayflower did not know this, then they cannot have been reading the motoring press for the last three years. How they came to misread the signals so disastrously is a mystery. Unless, of course, you subscribe to the other theory doing the rounds yesterday - that Sir Colin Chandler and Bernd Pischetsrieder have struck a sweetheart deal. BMW gets Mayflower's tanks off Vickers' lawn and in return is handed Rolls- Royce without the tiresome chore of an expensive auction.

Given BMW's connections with Rolls (it makes the engines) and Mr Pischetsrieder's sentimental attachment to the proud old names of British motoring, it must be in pole position. But to assume it will get Rolls at a knock-down price supposes that Vickers shareholders, led by Schroders with 20 per cent, are all fast asleep in the back seat. This is about as likely a scenario as Mayflower assembling a plausible bid.