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UPDATE 1-Belgian RHJ to submit improved Opel offer -sources

Published 07/12/2009, 09:36 AM
Updated 07/12/2009, 09:40 AM
STLAM
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(Recasts with sources, changes dateline from Berlin)

By Philipp Halstrick

FRANKFURT, July 12 (Reuters) - Belgian holding company RHJ International SA is readying an improved offer for General Motors Corp unit Opel that it hopes to submit this week, two sources familiar with its plans said on Sunday.

The new offer would be the second this month from a rival to leading Opel contender Magna International Inc, a Canadian auto parts group which has said it wants to agree a preliminary deal for Opel with its U.S. parent this week.

China's Beijing Automotive Industry Holding Co (BAIC) submitted a detailed non-binding bid for Opel earlier this month, according to documents seen by Reuters, in which it lays out a plan to use Opel's brand and technology to tap the huge Chinese market.

"RHJ is working urgently on a new offer," one of the sources told Reuters. Another source close to the sale process confirmed RHJ would submit a new bid and said its plan foresaw just under 10,000 job cuts across Opel's European operations.

An RHJ spokesman was not immediately available to comment on the matter. The company has yet to confirm or deny ever having bid for Opel.

Magna is still seen as the leading contender for Opel after signing a memorandum of understanding with GM in May.

But the German government, which agreed to supply 1.5 billion euros ($2.1 billion) in bridge financing to Opel while a takeover was finalised, has said the race remains wide open.

It has encouraged rival bidders such as RHJ, BAIC and Italy's Fiat SpA to come back with improved offers, partly to keep up the pressure on Magna.

Germany's Bild am Sonntag also reported on Sunday that RHJ was working on a new bid, which would require some 3.8 billion euros in government guarantees, less than the 4.5 billion that Magna has said it needs.

Despite noise from rivals, Magna has pressed ahead with talks on securing a framework deal with GM, which itself emerged from bankruptcy on Friday.

The head of Magna's European business told a German newspaper last week his company was on track to reach an agreement with GM and was targeting July 15 as a date for a preliminary deal.

But industry sources have told Reuters that Magna could delay a board meeting to approve the Opel deal which was originally set for July 14, suggesting a preliminary deal could be delayed beyond next week. (Additional reporting by Noah Barkin; Editing by David Holmes)

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