General Motors has invited several investors to hand in improved offers for its European operations, it emerged on Wednesday, as the US carmaker tried to put the screws on Magna, the frontrunner for the stake.
Beijing Automotive Industry Corporation (BAIC), the Chinese carmaker, aimed to hand in an enhanced offer for the GM business by the middle of July, several people briefed on the matter said.
Belgium-based financial investor RHJ International could also make a second offer for GM's cash-strapped European business, which includes Opel's operations in Germany, Spain and Belgium, as well as the Vauxhall unit in the UK, one person close to GM said.
GM earlier this month allowed both BAIC and RHJ International to look at Opel's books in an attempt to increase the pressure on Magna amid tough negotiations with the Canadian car parts supplier.
GM and BAIC declined to comment. RHJ could not be reached for comment.
Magna won preferred bidder status for GM's European unit last month, after signing a memorandum of understanding to take a 55 per cent stake alongside Russia's Sberbank.
Magna and GM have made little progress over issues, such as Magna's demand to include GM's Russian operations in the deal and GM's insistence that it is granted a pre-emptive buying right over the Opel stake. Neither issue was regarded as a deal-breaker, sources said.
GM expects to receive improved bids from BAIC and RHJ in the coming weeks. The carmaker had hoped to sign a deal by mid-July, but the failure to reach a deal so far could delay this target by several weeks.
People close to the US carmaker said the Canadian group remained the frontrunner. But one source said the other bidders “have not lost the race yet and could still overtake Magna”.
Karl-Theodor zu Guttenberg, Germany's economic minister, said recently that the government was still in contact with other investors.
Mr Guttenberg has always been sceptical about a sale to Magna, which has the strong backing of regional politicians and Opel's unions. He said the decision to name a preferred bidder was fraught with risk.
Fiat, an early favourite in the bidding, on Wednesday reiterated its interest in Opel and said its offer remained on the table and it would welcome a call from Berlin.
Last month, the German government agreed to provide €1.5bn ($2.1bn) in bridge loans to keep Opel afloat until a deal with Magna can be reached.
BAIC was a latecomer to the bidding process. But the carmaker, which offered €660m in equity for Opel and pledged not to cut any jobs for two years, recently stepped up efforts to unseat Magna. It has hired a series of advisors, among them Deutsche Bank.
