Opel bidder RHJ to ask for less state aid: report

FRANKFURT (Reuters) - Belgian-based RHJ International (RHJI.BR) will ask for less than 3 billion euros ($4.25 billion) of state aid as part of a bid for Opel, Handelsblatt reported, citing government and financial sources.

The private equity firm, which is linked to distressed asset specialist Ripplewood Holdings, is willing to substantially sweeten its previous offer for the former European unit of General Motors Co GM.UL that previously foresaw 3.8 billion euros in requested aid.

RHJ needs to garner more political support in Berlin, since Chancellor Angela Merkel said on Tuesday she was ready to intervene personally to support the competing bid of Canadian auto parts supplier Magna International MGa.TO.

The report, sent to the media before being published in the paper's Wednesday edition, provided no details as to why RHJ needed far less financial backing for the deal than before or if it planned to raise its equity bid of 275 million euros as well.

A financial source told Reuters that the report was accurate.

Germany's conservative economics minister, Karl-Theodor zu Guttenberg, has pushed Opel's bidders to shoulder more of the risk by raising the amount of equity in their bids proportional to state-guaranteed debt.

He also said that simply requiring less aid as part of a deal is not necessarily an advantage from the viewpoint of Berlin, if a weak business model means there is a high probability taxpayers won't get the money back.

Magna has offered to inject 500 million euros of total equity -- 350 million of it directly in cash -- but has calculated it requires 4.5 billion of state funding.

GM's chief negotiator on the Opel deal, Group Vice President John Smith, praised RHJ's offer last week as strategically equal with Magna's while being considerably easier to implement and financially a better deal for taxpayers.

Former Chinese bidder Beijing Automotive (BAIC) even offered a 660 million euro bid and 2.64 billion of state aid as part of its bid, but failed to agree with GM on key issues of technology transfer and access to intellectual property.

(Reporting by Christiaan Hetzner and Philipp Halstrick; Editing by Steve Orlofsky)