20 May Daily News Summary
Three bids expected for GM’s European operations
At least three bidders were expected to make formal offers for a stake in General Motors’ European operations today (Wednesday, May 20), and will be asked to come up with about €650 million.
RJH International, the Brussels-listed car parts holding company, Fiat and Canadian-based parts company Magna are reported to be the serious contenders for the struggling US carmaker’s Vauxhall/Opel division.
All three groups were expected to make offers for the stake by today’s deadline. The size of the stake will be worked out in talks, but GM wants to keep a minority stake of up to 40%.
Additional bids from up to three other private equity and sovereign wealth investors were still feasible but not as likely.
GM will give preference to cash bids, which could complicate Fiat’s bid as the Italian manufacturer is opposed to injecting cash into the group.
GM, which is expected to file for Chapter 11 bankruptcy protection in the US by June 1, has said that it wants to choose a partner for Vauxhall/Opel by the end of May. (Financial Times: May 20).
Saab to select buyer from three suitors
Saab says it has selected three suitors for continued talks as the up-for-sale loss-making General Motors-owned manufacturer looks for a new parent company.
The Swedish manufacturer has applied to the courts for an extension to its grace period under creditor protection.
The company has asked the Swedish courts for an additional three months of protection from creditors and revealed that it had whittled the field of interested parties down from 10 potential suitors.
The negotiations with the three selected organisations, which have not been identified, will be carried out during the remainder of May in order to select the final candidate.
The carmaker sought protection from creditors in February to buy time to find a new owner, after GM said it would cut ties with the brand by the turn of the year.
The courts will make a decision on whether to allow the reorganisation process to be extended late next week. (National newspapers: May 20).
Porsche chief in talks with Middle East investors
The long-running saga involving German vehicle manufacturers Porsche and Volkswagen has taken another twist with the news that the sports carmaker’s chief executive Wendelin Wiedeking is trying to woo Middle East investors.
He has held talks with several Middle East funds, some from Kuwait, Abu Dhabi and Qatar, about taking a stake of up to 25% in the carmaker through a cash injection thought to be up to €4 billion. Porsche is struggling under a €9bn debt pile.
However, it remains unclear whether the talks represent a bid to bolster Porsche’s endangered independence that will enable it to walk away from the proposed merger with Volkswagen, or were aimed at strengthening the sports carmaker’s clout in further negotiations.
Volkswagen suspended merger talks with Porsche over the weekend after it accused Porsche’s management of obstructing the negotiations about integration. However, since then there have been behind the scenes moves to bring the derailed talks back on track. (Financial Times/The Times: May 20).