* BAIC submits indicative bid - sources
* Binding bid seen by mid-July
* Winner faces tough EU cartel probe - German dep minister
* Opel task force head has doubts about Magna's concept
* UK govt. says may help fund any deal
(Adds BAIC bid report, detail on Vauxhall, background)
By Angelika Gruber and Christiaan Hetzner
FRANKFURT/MUNICH, July 3 A Chinese automaker has
offered to buy a stake in General Motors GMGMQ.PK unit Opel,
challenging a deal from Canadian auto parts supplier Magna
MGa.TO, sources said on Friday.
State-owned Beijing Automotive (BAIC) has submitted an
indicative, non-binding offer for Germany's Opel, sources
familiar with the situation told Reuters, and would make a
binding offer by mid-July.
The news comes ahead of a Friday deadline for GM lawyers to
submit papers to U.S. federal bankruptcy Judge Robert Gerber who
will rule by July 10 on a plan to create a "new GM" with brands
Chevrolet, Cadillac, Buick and truck unit GMC. [ID:nN0287954]
Magna, backed by Russian partners, is the frontrunner to buy
Opel. Sources told Reuters on Thursday that Magna's board of
directors wants to approve a business plan for Opel on July 7.
Belgian holding company RHJ International RHJI.BR is the
third bidder, although it posted a sharply wider full-year loss
on Wednesday and analysts are doubtful it has the cash to
compete with its rival suitors. [ID:nL170648]
Whoever wins the race for Opel faces a tough antitrust
probe, a German government minister said on Friday.
When asked whether he counted on Brussels examining any deal
for Opel under a lengthier, so-called 'phase II' investigation,
German Deputy Economics Minister Jochen Homann told reporters:
He declined to specify what issues might concern EU
competition authorities since the German government is still
awaiting a business plan for the takeover, which he hoped to get
by the end of July.
Any business plans submitted will be evaluated by
PriceWaterhouse Coopers on behalf of Berlin, since the
government will have to offer more state aid after already
extending Opel a six-month 1.5 billion euro ($2.1 billion)
bridge loan that matures on Nov. 30.
"Every day that there is no restructuring costs money, every
month that goes by is a lost month," said Homann, the head of
the government's Opel task force.
Some support may come from Britain, where GM produces and
markets Opel cars under the Vauxhall brand.
The British government said on Friday it was prepared to
support any deal, possibly in the form of loans, if the terms
"I'm not going to discuss the detail of any financial
underwriting, but it may involve loans or loan guarantees,"
Business Secretary Peter Mandelson said. "We would obviously
have to have interest paid and some security (for the loans)."
Speaking at a Handelsblatt auto industry conference, Homann
expressed scepticism over Magna's concept for Opel and said that
vested interests praising the auto parts supplier's offer as the
best left the German government open to "extortion".
"We will see whether Magna's concept is successful. It is
based on theories over which one can heartily discuss...There
are justifiable question marks," he explained.
He expressed doubts as to the wisdom of basing a business
plan on the boom-and-bust Russian car market and questioned
whether Magna could lure other carmakers to utilise Opel's
unused production capacity.
Homann, who reports to Minister Karl-Theodor zu Guttenberg,
stated no preference for any of the three current bidders.
Homann warned that whoever wants to acquire Opel would have
to prepare for a tough EU cartel probe.
"The negotiating parties would be well advised to develop a
concept that is economically sustainable, fulfils our laws
governing loan guarantees and is compliant with EU subsidy
rules," he told the conference.
Homann pointed to the chronic structural overcapacities that
the EU is concerned about and cautioned that the European
Commission has stated a bailout could not distort competition.
Sources familiar with the Opel negotiations have voiced
anxiety that Paris might try to install French Economy Minister
Christine Lagarde as the next EU Competition Commissioner under
a likely second term for President Jose Manuel Barroso.
They fear she might be more critical in part since Opel does
not have any major manufacturing operations in France, home to
key competitors PSA Peugeot Citroen and Renault (RENA.PA), which
counts the French state as a large shareholder.
(Editing by Michael Shields and Simon Jessop)