Opel-bid loser RHJ ups profile, still needs deal

BRUSSELS (Reuters) - Brussels-listed investment group RHJ International (RHJI.BR) needs to break a losing streak in bidding battles, but has at least gained one vital asset from its Opel failure -- publicity.

Analysts also argue that it may prove better for the Belgian company to have lost out to Canadian auto parts maker Magna MGa.TO so it can focus efforts instead on its stated ambition of buying a small European bank.

RHJ is no longer an obscure Belgian company that many wrongly considered to be part of U.S. private equity group Ripplewood Holdings LLC rather than a spin-off from it.

"They have gained exposure to the financial community. They have a huge cash position and are chasing deals. In that respect, it can help them to find interesting things," said Bank Degroof analyst Hans D'Haese.

Opel adds to a list of lost battles that include German business lender IKB IKBG.DE, South Korea's Daewoo Electronics Corp, U.S. washing machine and refrigerator maker Maytag and possibly Commerzbank (CBKG.DE) wealth management unit Reuschel.

RHJ has declined to comment, and its relatively illiquid shares have barely responded to the news. They fell 1.2 percent on Thursday and were 0.6 percent weaker on Friday afternoon.

D'Haese argues that RHJ was lucky in hindsight to have lost out to Lone Star last year for IKB and is better off not having bought Opel now -- even if this was more due to political than economic reasons.

"It would have been very large, too large in their portfolio ... I'm not so disappointed that they missed it," D'Haese said.

Nevertheless, RHJ has not made an acquisition since 2006 and pressure is surely growing to succeed with a bid.

Its clearly stated target is a financial services company in Europe, possibly in Germany.

RHJ is better known than before, but in Opel heartland Germany it failed to differentiate itself from private equity buyers, dubbed "locusts" by a leading German politician.

"If they wanted a bank in Germany, I wonder if the reasoning would apply as well," said KBC Securities analyst Tim Simonts.

Chief Executive Leonhard Fischer, a former Dresdner Bank executive, made a point of saying that as a publicly listed industrial holding, RHJ invested for the long term.

Simonts said the reason RHJ span off from Ripplewood and listed was to demonstrate it was a longer-term player and said its track record showed it did not simply strip assets and suck companies dry.

Arguably the political pressure that worked against RHJ would apply less in the financial sector than the auto sector, the pride of German industry.

The company is ready to act and was sitting on cash at the end of March of 447.7 million euros ($653.8 million), slightly more than the value of its own shares. Unlike rivals, RHJ did not overleverage in the boom times before the credit crunch.

However, with little imminent return expected from its struggling Japanese and auto part assets, a cash generator is required.

RHJ has not made a profit since it listed in 2005. Impairments of its automotive-heavy portfolio resulted in a 1 billion euro loss in the year to March 2009.

"It's now or never," said Simonts. "They've stepped up efforts. A small corporate bank with lots of customers and loans would give them recurring income."

(Edited by Sitaraman Shankar)