Four Financial Investors View Opel Stake

FRANKFURT (Reuters) – Four financial and two strategic investors are in talks with General Motors Corp (GM.N) to buy a possible majority stake in Opel for a direct investment of at least 500 million euros, a banker close to negotiations told Reuters.

The source confirmed a report in the Financial Times that half a billion euros ($649 million), was the minimum cash injection expected. [ID:nN19354663]

None of Germany’s automakers nor Fiat SpA (FIA.MI), which had been repeatedly named by the media as a potential partner for Opel, was involved in the sale process, the source said. Another source said both strategic investors were non-German.

Automotive News reported earlier on Monday that Fiat may join up with Opel in addition to Chrysler, although the Italian carmaker’s chairman, Luca Cordero de Montezemolo, had dismissed similar speculation by the Corriere della Sera newspaper on Friday.

Bernstein analyst Max Warburton argued that Fiat would be better served walking away from Chrysler to pursue an alliance with Opel, unlocking estimated savings of 1.5 billion euros – nearly seven times more than in a Chrysler tie-up before any job cuts or plant closures.

“What’s the link between a Punto and a pick-up, perhaps some common steel purchasing. Then why not do a deal with a washing machine maker?” Warburton wrote in a research report.

The banker said well-known private equity firms were also among the parties interested in Opel. However, they would have to rely on traditional capital gains from a successful restructuring of Opel rather than a classic leveraged buyout.

Sovereign wealth funds, by comparison, could be more interested since they rarely seek management control and mainly purchase minority holdings.

GM aims to compile a shortlist of possible bidders by early May, after which investors could start due diligence on Opel, two people familiar with the matter said.

Meanwhile, the 4,000 European Opel dealers from 25 different countries organised under the Euroda association are examining whether they might need to negotiate with banks for a loan to finance a planned purchase of a minority stake in the company.

MANAGMENT CHANGE

So far, dealers from 15 countries including Germany and France have already signed up for a plan to contribute 150 euros from each vehicle sold retail for a period of three years and Euroda chairman Jaap Timmer expects the remaining 10, including England and Russia, to agree as well.

“This could generate an amount of around 400 million euros, possibly even 500 million,” he told Reuters on Monday.

Negotiations with GM would then determine whether the dealers could acquire their stake by paying regular instalments or through a lump sum then borrowed from creditors.

Timmer rejected calls for Opel’s non-executive chairman Carl-Peter Forster to step down from his post due to a conflict of interest since his main responsibility was to represent GM as head of the carmaker’s European operations.

Over the weekend, the head of Germany’s largest Opel dealership suggested the former CEO of BMW and Volkswagen, Bernd Pischetsrieder, should take the helm at Opel since a more independent manager was needed in order to better defend the German carmaker’s interests in dealings with Detroit.

A source close to Pischetsrieder told Reuters on Monday that he felt Forster was quite competent and consequently had no interest in the job.

(Reporting by Philipp Halstrick, Christiaan Hetzner, Patricia Uhlig and Angelika Gruber; editing by John Stonestreet)