General Motors officials meet German government representatives today to discuss takeover offers for Opel, with a potential row looming as they each appear to prefer a different bidder.
GM has received three bids for Opel - from a consortium of Magna and Sberbank, private equity firm RHJ International, and China's Beijing Automotive (BAIC) - and now has to agree with Germany on the investor.
The German government, and the German states with Opel sites, have indicated a preference for Canadian auto supplier Magna, while GM likes the offer from RHJ, a Belgium-based financial investor.
Several people familiar with the matter said today that the states that are home to Opel factories still prefer Magna's offer over the bid made by RHJ.
The states of Rhineland-Palatinate, Hesse, North Rhine-Westphalia and Thuringia discussed the matter today, two sources said.
GM holds 35 per cent of Opel shares, while the German government is being asked to provide loan guarantees worth up to €4.5 billion.
If they disagree, the end game will play out in the Opel Trust which has been responsible for Opel since GM entered bankruptcy in June. The trust holds 65 per cent of Opel shares and has to approve of any investor.
The Trust's board is comprised of two GM representatives and two for Germany, one for Berlin and a delegate for the four federal states in which Opel has a plant.
There is a fifth "neutral" board member - Fred Irwin, President of the American Chamber of Commerce in Germany - but he has no vote. He may, however, be forced to try to actively broker a deal.
Magna wants to expand Opel's full-scale car assembly business and forecasts high growth rates, particularly in Russia, home of its consortium partner Sberbank.
RHJ envisages shrinking Opel's production footprint and returning the company to profitability.
A German government source said yesterday that today's meeting would not yield a decision on which bidder will succeed in taking a stake in Opel, and that it is unlikely a preliminary decision will be made on Opel's future this week.
Separately, representatives of Magna are scheduled to meet the heads of the European Opel dealers' association to discuss their involvement in the sales and distribution structure.
Reuters