Topic: Magna/Opel not a sure thing?

[sailor723]

It looks like the Magna takeover of GM's Opel subsidiary may not be a sure thing.

http://www.bloomberg.com/apps/news?pid=20601082&sid=aB8iL7IUIiEk

[Careener]

TTAC has had pretty good coverage since day 1.
There was un update yesterday as well.

[sailor723]

Sorry....TTAC??

[random006]

Sorry....TTAC??

The Truth About Cars:
http://www.thetruthaboutcars.com/

[sailor723]

Aha....thank you

[Erik]

Damn shame if it doesn't work out. Would have been nice to see it happen.

[Careener]

Here's the latest

http://www.thetruthaboutcars.com/opel-watch-buyback-is-a-:censor:/

A month ago, we reported that GM offered to buy back Opel some day “when we do better after a restructuring phase.” Offered? GM downright demands the right to buy back Opel after a buyer has successfully resuscitated and restructured Opel.

The rumors of such a demand have been around for a while. GM is pretty much the only one on the planet who thinks this is a swell idea.


A week ago, Belgium’s Standard headlined “GM dringt aan op terugkoopmogelijkheid voor Opel” — any child knows that this means “GM demands buy back option for Opel.” A few days later, Roland Koch, premier of Opel’s home state Hesse sent a “clear response of opposition” to that plan. GM should listen to Herr Koch, because without his support, no deal.

Either GM didn’t get the memo, or they are hard of hearing. One can understand that they are having problems understanding Dutch or Deutsch (or Flemish). So today, Canada’s Globe & Mail puts it in plain English: “GM push for buyback could halt Magna’s Opel bid.” It’s not too hard to understand that the buyback demand is a deal breaker. The Globe & Mail spells it out:

Magna, which is leading a joint bid with Sberbank of Russia to take a controlling stake in Opel, does not want to perform the difficult and lengthy task of repairing the auto maker and restoring it to profitability, only to be forced to sell the division back to General Motors in a few years, people close to the negotiations said yesterday.

As evidenced by Herrn Koch’s reaction, the German government would also take a dim view of any clause allowing GM to buy back Opel. Germany goes by old Admiralty law and claims salvage rights, German style: We save the wreck, we keep it.

According to the usual source close to the matter, the buyback clause was added after the original memorandum of understanding was signed between Magna, GM and the German government in May. “If General Motors changes the game, then Magna will walk away,” the source said.

The buyback imbroglio may explain why GM resurrected other bidders, such as RHJ and China’s BAIC. BAIC probably will say “bu hao” (no good) to the request, and would (once alone) call the GM negotiators “250s” (the Chinese way of saying that someone is three cans short of a sixpack.) RHJ could possibly go for it—if the price is right. But they need the help of the German government, and their answer is: “Nein. Keine Rückkaufklausel.”

The Frankfurter Allgemeine doesn’t think that the buyback clause is a deal breaker. Why? It may not have occurred to GM that they don’t own Opel anymore. 65 percent of Opel are in trusteeship, precondition for the €1.5 billion bridge loan the German government gave. If GM continues to play games, the trustees just may make a decision.

Update: Reuters reports that suitor RHJ posted a sharply wider full-year loss and a 43 percent fall in the value of its portfolio, and most likely will not have the money to buy Opel.

“RHJ can’t acquire a majority stake or a large minority in Opel, because they simply don’t have the cash — RHJ doesn’t even come close,” KBC Securities analyst Tom Simonts told Reuters.

[safristi]

GM's MAGNUS OPEL.......set it to WAGNER.....and take it around the RING fer a SPIN.............whatevers LEFT is GOTTERUNDAMING better be GOOD fer the PEOPLE...........

[tpl]

Todays news on this from the Times.

GM Europe may slip away from Magna
Dominic O’Connell

MAGNA’S grasp on General Motors Europe, the owner of Vauxhall and Opel, appeared to be slipping this weekend as it emerged that all three bidders for the group will be asked to present their plans to Barack Obama’s automotive task force at the end of the month.

Magna, an Austro-Canadian maker of car components, had been regarded as firm favourite to take control of GM Europe, which was put up for sale following the collapse into Chapter 11 bankruptcy of its American parent company.

GM and the German government, which will bankroll the new owner of GM Europe with up to ¤3 billion (£2.6 billion) in state aid, signed a memorandum of understanding with Magna at the end of May.

Magna has said that the deal was exclusive, but two other bidders have since emerged: Beijing Automotive Industry Holding Company (BAIC) and RJH, a quoted Belgian industrial conglomerate with ties to the American private-equity group Ripplewood.

It is understood that the talks with Magna have become bogged down in disagreements over intellectual property. GM, which will remain a large minority shareholder in GM Europe, does not want Magna to have the rights to use GM technology outside Opel and Vauxhall.

Magna’s main partners in its bid are the Russian bank Sberbank, and the Russian automotive group Gaz.

GM insiders say they are fearful their company’s technology could be used to build cars in Russia that would compete with their own products.

There is a separate disagreement over whether Magna and its partners should get control of the Chevrolet dealership chain in Russia.

In the meantime, BAIC and RJH have submitted improved bids in the past week. RJH is understood to have proposed a scheme that will allow GM, which emerged from Chapter 11 in America at the end of last week, to buy back Opel and Vauxhall after three years.

GM is expected to confirm this week that all three bidders will now present their plans to President Obama’s automotive task force, which has led the restructuring of Detroit’s big players.

The American government is now the largest shareholder in GM. With the German government, the task force plans to pick a preferred bidder from the trio by the end of August.

Senior industry sources said that Magna could still win out. “Their plan was the most acceptable to the Germans because of undertakings given about the future of German plants,” one source commented. “But at the moment it is quite an open race.”

Lord Mandelson, the business secretary, has said he is prepared to commit government money to GM’s new owner in order to preserve jobs at Vauxhall’s two UK factories, at Ellesmere Port on Merseyside and at Luton. The two sites together employ around 5,000 workers.