Dutch car maker eyeing Midland buyout

Spyker said in a statement the outcome of the negotiations was still uncertain, but if an acquisition went ahead, it would consider issuing shares to partially finance the deal, which it said Mol's consortium would subscribe to "for a large part".

"At the appropriate time further announcements will be made. In any event the acquisition will be subject to Spyker Shareholders' and Supervisory Board approval," Spyker said.

Spyker Chief Executive Victor Muller said Formula One would be a good way to market its brand: "After World Cup football, it is without doubt the best way to promote products," he told ANP-Reuters, declining to put a figure on the possible deal.

Fortis analyst Sebastiaan Schreijen said he was sceptical about whether the buy would help Spyker's results.

"It could be that taking part in the race totally overshadows the trajectory towards becoming profitable," he said.

Shares in Spyker were down 2.6 percent at 16.89 euros by 10:56 GMT.

In June, Midland's billionaire owner Alex Shnaider said he was considering selling his team to Mol's consortium for around 100 million euros ($128 million).

Mol is the founder of Dutch internet firm Lost Boys whose brand appears on the Midland car as backers of Dutch driver Christijan Albers.

Shnaider, a Russian-born Canadian who has made his fortune in steel and heavy industries throughout the former Soviet bloc, entered Formula One at the beginning of 2005 after buying Silverstone-based Jordan.

Spyker said last Friday it was cash-flow positive for the first time since its launch in 2000 on strong demand for its tailor-made super cars, with 1.3 million euros as of June 30.

The maker of two-seaters that retail from around 250,000 euros, which went public in 2004, said first-half sales tripled to 12.8 million euros from 4 million euros a year earlier.

The automaker, which has five models including the C8 Spyder and C8 Laviolette, has yet to make a profit but some analysts expect it to do so by 2009.

Spyker's roots reach back more than 100 years to a family auto shop that once built the Golden State Coach for the Dutch royal family.

Reborn in 2000 and targeting the "super-car" market niche, Spyker competes with top end sports cars such as Bugatti, Lotus, Lamborghini, Aston Martin and Ferrari.

The original Spyker had competed with Rolls-Royce before going bankrupt in 1926.