FRANKFURT/DETROIT The board of General Motors Co declined on Friday to name Canada's Magna International as the winning bidder for Opel, leaving the fate of its German unit up in the air.
Two sources familiar with the situation said GM's board had opted to ask for more information from the German government on state financing available to complete a deal.
Specifically, GM directors asked Berlin what financing would be available to back a rival bid for Opel by Brussels-based financial investor RHJ International. "This was a topic at the meeting," said one of the sources.
The sources asked not to be named because they were not authorized to discuss the private talks.
Earlier on Friday, sources close to the matter said GM management was leaning toward endorsing Magna and its Russian partners as preferred buyers for Opel after coming under heavy pressure from the German government.
"The GM board of directors met today to discuss options for Opel. No decision was taken," GM spokeswoman Karin Kirchner said in a statement late on Friday.
Germany's government, which faces elections next month, has offered its financial backing for the Magna bid because it believes it would be the best option to save jobs.
Berlin and the German states that host Opel plants have made clear they want Magna to get the carmaker and are set to provide 4.5 billion euros ($6.4 billion) in state aid to make it happen. ID:nLJ39047
But German officials have been less willing to support a bid from RHJ and have not detailed the potential financial support it could receive.
A German official familiar with the talks told Reuters that he was confident the outstanding questions could be cleared up after a new round of talks with GM.
"Talks between the government and GM will be continued at the start of next week," said the official, who did not want to be named.
Under the proposed terms of the Magna deal, Magna and Sberbank would each own 27.5 percent of the company. Opel's employees would hold 10 percent and GM would hold the remaining 35 percent.
Russian carmaker GAZ Group would be an industrial partner with the option to buy Sberbank's stake.
The alternative to a sale of Opel would be insolvency, analysts have said. Opel began making cars in 1899, and it has been a cornerstone of GM's operations for the past 80 years.
Earlier this month, GM Chief Executive Fritz Henderson ruled out the possibility that the automaker could reopen the bidding for Opel to other parties.
The U.S. government, which financed GM's U.S. bankruptcy, has also ruled out using any of the roughly $50 billion it has provided to the Detroit-based automaker to support its international operations.
Germany has already provided 1.5 billion euros in bridge financing for Opel. As a result, German trustees overseeing a majority stake in Opel have to approve any deal after it clears the GM board.
The sale of Opel is being keenly watched as billions of euros in government aid are riding on the outcome as are the employment prospects of thousands of its workers in Europe.
A Magna victory would be a coup for its founder and chairman, Frank Stronach, who left Europe a poor toolmaker half a century ago and built his company into one of the world's biggest automotive suppliers.
It would mark a setback for Leonhard Fischer, the former investment banker and turnaround specialist who runs RHJ.
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In Germany, Opel employs over 25,000 people in four major plants making everything from three-door Corsa subcompacts to Zafira vans. In the U.K., there are two key factories that produce automobiles under the Vauxhall badge. Opel has other facilities in Belgium, Poland and Spain.
Opel and its sister brand Vauxhall sold just over 560,000 cars in Europe in the first half of the year for a market share of 7.6 percent, according to data compiled by the ACEA auto industry association.
Opel's Astra compact competes with the Volkswagen Golf in the mass market. Its other best sellers include the small Corsa model and the mid-sized Insignia, which was voted European Car of the Year by automotive journalists.
One concern for GM has been the control it could exert on Opel intellectual property and vehicle technology since Sberbank and GAZ are seen as eager to use their proposed investment to target the growing Russian auto market.
Magna's co-CEO Siegfried Wolf said last week the Canadian company and its Russian partner Sberbank SBER.RTS had reached an agreement in principle with GM over a contract to buy 55 percent of Opel, raising hopes of a deal.
But GM's top negotiator for the Opel deal, John Smith, has repeatedly cited the positive aspects of RHJ's offer, which he says would be easier to implement than Magna's plan.
The field of bidders narrowed to two when Italian carmaker Fiat and China's Beijing Automotive dropped out.
GM, which emerged from bankruptcy protection on July 10, this week agreed to sell its Saab car business to a tiny Swedish luxury carmaker, the first in a series of big sales the U.S. group is planning as it slims down.