25.05.2009 TALKS CONTINUE BETWEEN GERMAN GOVERNMENT AND OPEL BIDDERS'

OPEL

Talks are continuing between the German government and the three bidders for Opel - Fiat, Magna and RHJ - with negotiations between the former two being most intense due to the complexity of their bids. "Fiat and Magna have submitted more complex blueprints," government spokesman Ulrich Wilhelm told reporters today. The third bidder is Brussels-based private equity house RHJ International which is regarded as the outsider.

With intense negotiations having gone on throughout the weekend, German government ministers' met again this morning in a meeting chaired by the Chancellor, Angela Merkel. She said during a press conference afterwards that the proposals were changing on a daily basis and that the talks were continuing with all three bidders.

Merkel and Economy Minister Karl-Theodor zu Guttenberg, who is spearheading the drive to find a major investor for Opel, met in secret yesterday afternoon with the management of Magna International, claimed the German daily newspaper Bild this morning, reports AGI. The newspaper claims that job guarantees and the restitution of loans promised by the government to the buyer of Opel were on the agenda, with Merkel and Guttenberg trying to obtain more concessions particularly regarding redundancies.

Bild confirmed that the Austro-Canadian components manufacturer is still the preferred bidder of the German government. The plan presented by Magna includes a cut of 2,850 jobs in Opel plants in Germany and the request for a government guarantee of 4.5 billion euros. According to the newspaper, if Magna turns out to be unwilling to make more concessions, the second option of the German government would be controlled insolvency. According to sources in Magna's management the group is willing to compromise with the German government and to improve its offer. Bild also revealed that Sergio Marchionne will visit Berlin tomorrow to meeting Guttenberg again. The Financial Times Deutschland wrote this morning that tomorrow or Wednesday the German government will take a decision on the three offers it has received.

Meanwhile Italian Premier Silvio Berlusconi is convinced that the German government will make a an objective assessment of the offers it has received for the acquisition of Opel, reported AGI this morning. He pointed out that he doesn't want to interfere with the choice. In an interview with CNN, the Italian premier said that he is certain the three bids, including the one made by Fiat, ''will be assessed objectively'' by the German government. ''They will pick the one they think is best. I don't think they prefer one company to the other. I think they will to what they think is best for Opel''. CNN then asked if the prime minister has discussed it with Merkel. ''No'' he responded, ''I haven't spoken with Merkel, I don't want to interfere, but I know her and I know that is what she'll do.''

Italian Industry Minister Claudio Scajola reckons that Fiat's takeover proposals for Opel are "more complex" than its recent negotiations with American carmaker Chrysler LLC due to the looming German general election which is making the subject of job losses a very politically sensitive issue. The "elections in Germany," make the bidding process more complex, commented Scajola during a forum on energy which took place in Rome today. Scajola, who last week called on Fiat to ensure all its five key Italian factories remain open if a merger with Opel goes ahead, also told reporters today that he will meet with Fiat senior management in the "coming" days to discuss the future of its Italian facilities if the Opel merger gets the green light.
 

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