Update: Ford Named Exclusive Bidder for Daewoo Motor - TheStreet

Updated from 7:32 a.m. EDT

Ford Motor

(F) - Get Report

was named the exclusive bidder for indebted South Korean auto giant

Daewoo Motor

on Thursday, beating out joint proposals by

DaimlerChrysler

(DCX)

and

Hyundai

, South Korea's largest automaker, and

General Motors

(GM) - Get Report

and Italy's

Fiat

.

Ford, based in Dearborn, Mich., offered $6.9 billion for the automaker, according to a report in

Reuters

, and has six weeks to conduct due diligence before submitting a final bid.

"Obviously, it's big news," said Jonathan Lawrence, an analyst at

Dain Rauscher Wessels

who researches Ford. "Originally, GM was viewed as the leading candidate."

From 1978 to 1992, GM owned 50% of Daewoo before selling its stake back to the company.

Lawrence said Ford is the best positioned among the three bidders to win Daewoo since it is sitting on the most cash. He said, however, that analysts have no way of gauging a fair price for Daewoo since they don't have access to the company's finances. Even Ford can't adequately evaluate the price tag, he said. "That price is likely to come down," said Lawrence, of the reported $6.9 billion bid, since Ford will be able to make a more accurate offer once it completes due dilligence.

A Ford buyout of Daewoo would give the automaker better exposure to the small car market and a greater presence in Asia, where it is behind rival GM, Lawrence said. Lawrence has a strong buy rating on Ford, and his firm has not done underwriting for the automaker.

GM spokesman John Mueller said, "We'll stay close to the situation and see how it goes. We're obviously very disappointed. We think we understand the value of the company better than anyone."

Another analyst thought the DaimlerChrysler-Hyundai partnership would win out, if only for political reasons. Political opposition exists in Korea to foreign ownership of Korean companies, said David Healy, an analyst at

Burnham Securities

.

Healy said it will take Ford -- should it ultimately buy Daewoo -- about three to five years to see a return on its investment. Daewoo has long been in the financial doldrums. It tried to expand too rapidly and has upward of $16 billion in debt, Healy said.

Healy does not issue formal ratings, but if he did he would tag Ford with a buy, although "only for patient people." His firm has not served as an underwriter for Ford.

If the sale goes through, it would mark the first time one of Korea's large manufacturing companies -- known as chaebols -- is sold to a foreign company.

Ford made an unsuccessful run at Korea's

Kia Motors

in 1998.

Daewoo has the capacity to produce 2 million vehicles a year and sold over 945,000 vehicles last year.

Ford closed at 43 1/4, up 1 5/16 or 3%, in trading Thursday.