Magna Submits Improved Bid to GM for Opel
July 28, 2009
Canadian auto-parts supplier Magna International reportedly has increased the amount of
upfront capital it will inject into its offer for General Motors' Opel. No word on whether its competitor RHJ International has countered.
Unnamed government sources have told various news outlets that Magna is now offering 350 million euros ($700 million U.S.) of its own capital immediately and 150 million euros in a convertible bond.
Originally, Magna said it would invest just over 100 million euros in two payments of 50 million euro each along with another 400 million in convertible debt.
The German government, which has been asked for loan guarantees for any offer for Opel, wanted the bidders, now apparently narrowed to two, to boost their upfront cash investments.
Magna's offer includes participation by Russia Sberbank. Also in the running is Belgian-based private equity firm RHJ International. The German government reportedly prefers the Magna offer. So do Opel workers. Opel has asked employees to contribute nearly $2 billion in cost cuts between 2010 and 2014, the company's unions revealed Monday, so they want a say in the outcome.
GM supposedly favors the RHJ deal as a better business deal with fewer complications than Magna's bid.
GM's board will review the Opel bids on August 3. -- By Michelle Krebs
Posted by Michelle Krebs at 8:02 AM under Business , GM , News | Comments (0) | digg this | Seed Newsvine
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