RHJ and Magna face off in bid for Opel
BERLIN (Reuters) - Belgium-based investor RHJ International is offering 275 million euros ($388 million) for a majority stake in General Motors' Opel business in a last-ditch bid to beat early frontrunner Magna.
RHJ's non-binding offer document, entitled "Project Beam" and obtained by Reuters on Friday, foresees production cutbacks and pay cuts for staff at the carmaker, which GM is selling amid a slimming programme to restore profitability.
With the plan, RHJ hopes to outmaneuver Canadian auto parts group Magna International Inc, which secured the favorite's tag when it signed a memorandum of understanding with GM to acquire the Ruesselsheim-based group nearly two months ago.
Magna, backed by Russia's Sberbank, wants to use Opel to make an aggressive push into the Russian market.
RHJ plans a more traditional restructuring of Opel's European operations, which stretch from Germany to Belgium, Britain, Poland and Spain.
The pursuit of Opel is part of a broader consolidation of the car sector in Germany and beyond which was given added impetus by the global economic crisis.
Because Opel has been placed under the ownership of a trustee in which both GM and the German government have a stake, the process of deciding a suitor has become more complex.
Speaking at a news conference with Russian President Dmitry Medvedev near Munich on Thursday, German Chancellor Angela Merkel voiced support for the Magna plan.
Her spokesman Ulrich Wilhelm went even further on Friday, saying Berlin had a preference for the Canadian group's plan, which is also backed by the four German states where Opel has plants and by the carmaker's unions.
Still, some elements within Germany's "grand coalition" government appear frustrated Magna is not contributing more cash and sources close to the talks have also told Reuters elements within GM view the RHJ bid favorably.
LESS GUARANTEES
According to the offer document, the RHJ plan requires 3.8 billion euros in government guarantees, less than the 4.5 billion Magna is demanding.
RHJ would contribute 175 million euros at the closing of a deal for Opel and an additional 100 million at the end of 2012, good for a majority stake of 50.1 percent.
Under the plan, GM would keep a 39.9 percent stake in Opel and employees would hold 10 percent in exchange for agreeing to contribute between 250 million euros and 300 million in savings per year through job and pay cuts.
RHJ would reduce Opel's headcount by 9,900, shutting a plant in Antwerp, Belgium in March 2010 and downsizing the carmaker's four German plants, but keeping all of them open. Continued...
