SCENARIOS: The hands GM board could deal in Opel poker

FRANKFURT (Reuters) - U.S. carmaker General Motors' GM.UL board of directors is expected to meet on Tuesday and Wednesday to discuss its plans for European automaker Opel.

The German government has put pressure on GM to choose a buyer for Opel this week. Berlin has favored Canadian auto parts maker Magna (MGa.TO), while GM is thought to favor either keeping the business or selling to rival bidder RHJ (RHJI.BR).

Here are some possible outcomes of the board meeting:

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 ($6.45 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, with an eye on the GM brand Vauxhall's operations, has said the decision "should not be distorted by political considerations in any one country."

GM BOARD RECOMMENDS RHJ

RHJ last week raised the stakes by sweetening its bid for Opel. The Brussels-listed company said it was now offering 300 million euros in cash for a 50.1 percent stake in Opel, 25 million more than its first bid made on July 20.

RHJ also said it would ask for only 3.2 billion euros in state aid, 600 million less than initially planned.

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 require less taxpayer money.

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

The German government has so far refused to back a bid from RHJ.

GM SEEKS TO KEEP OPEL

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