Unipart is keeping tight lipped over reports that it may buy Birmingham automotive parts company Partco for £178.9m.

The Cowley company would also take on the public company's £45m debts - so the total size of the deal being considered is £223.9m.

Partco announced that it was negotiating a deal, but Unipart declined to comment.

Partco is a leader in the vehicle parts aftermarket.

Last month it announced a 1.8 per cent increase in annual pre-tax profits to £21.7m from turnover up 13 per cent at £435.6m.

Unipart Group, which was a wholly-owned subsidiary of Rover until it was privatised in a management and institutional buy-out 11 years ago, has interests in motor components, distribution, and logistics.

Earlier this month it announced that it is to pay £24m to buy Rover's remaining 20 per cent shareholding.

Apart from the Rover stake, Unipart is owned 46 per cent by its 4,500 employees and directors. The remaining shares belong to City institutions led by Electra Fleming.

Rover's owner, BMW, announced last year that it would not renew Unipart's contract to distribute Rover parts when the deal expires in 2002.

However, the company has made up much of the shortfall with new business, including a contract from Jaguar.

Partco's shares rose nearly 30 per cent when the firm announced the negotiations with Unipart.

Story date: Friday 30 April

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.