SCENARIOS: The hands GM board could deal in Opel poker

FRANKFURT (Reuters) - The German government acknowledged for the first time in talks with GM's GM.UL chief negotiator John Smith the possibility that it would agree to sell Opel to RHJ International (RHJI.BR) under certain conditions, Bild reported on Wednesday without naming sources.

Despite prodding from Smith, Germany's Chancellor Angela Merkel and the German states had so far refused to back Belgium-based financial investor RHJ's rival bid over their preference for Canadian car parts group Magna MGa.TO.

Here are some of the possible outcomes:

GM BOARD BACKS MAGNA OFFER

The German government, top politicians in four German states with Opel plants and Opel's 25,000 staff in Germany are pushing for this decision, hoping Magna's expertise in the car business will serve Opel better and save more jobs.

Should GM back a sale to Magna, the federal and state governments in Germany are likely to approve 4.5 billion euros ($6.4 billion) in state aid to keep Opel afloat, then seek contributions from other countries with Opel plants.

It remains to be seen whether Opel staff in other European countries such as Britain, Spain and Belgium will be as keen to embrace Magna, given its cost-cutting plans.

The British government has also said the decision "should not be distorted by political considerations in any one country."

GM BOARD RECOMMENDS RHJ

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 and requires less taxpayer money.

Sources at GM said RHJ, which is linked to Tim Collins' Ripplewood buyout group, could grant GM a right of first offer as part of a deal.

German officials had signaled RHJ was less likely than Magna to get state aid for the deal, but Bild newspaper reported on Wednesday that the German government would be willing to consider otherwise if RHJ were able to find a "strong, internationally operating automotive group" as a strategic partner.

GM SEEKS TO KEEP OPEL

Sources familiar with the negotiations told Reuters on Monday that GM was considering dropping plans to relinquish control of Opel altogether and instead raise $4 billion to keep the unit.

Because GM is barred from using funding from the U.S. government to support its international operations, one of the options could include raising money by selling or mortgaging the automaker's assets in China, one source said.

Analysts doubt that GM could or would be willing to part with its operations in this key growth market, where it has joint ventures with Shanghai Automotive and light commercial vehicle maker Wuling, viewing the idea as a bargaining tactic.

Such a step would also mean GM would have to refinance a 1.5 billion euro bridge loan granted by the German government. The company could not count on European state aid for the billions needed to reorganize Opel.

"By not selling Opel/Vauxhall, GM has essentially two options -- providing 3 billion euros ($4.3 billion) to continue operations (less than the 4.5 billion promised by the German government) or liquidation," credit analysts at UniCredit said on Tuesday.

($1=.7028 Euro)

(Reporting by Angelika Gruber and Maria Sheahan; editing by Will Waterman and Erica Billingham