Reports overnight say that a crunch meeting of the German cabinet last night handed Fiat and Magna International 'preferred bidder' status and these two rival companies will now be able to examine Opel's books in detail and make revisions to their bids. The news has been published today in Germany's Die Welt newspaper. The other two prospective bidders for Opel, Brussels-based private equity house RHJ International and Chinese carmaker BAIC, had their offers rejected though they will be allowed to submit new offers. The 'due diligence' process is expected to take around four weeks.

The German government has expressed itself dissatisfied with both Fiat's and Magna's bids for Opel, saying both proposals "fall short", and the two suitors have been constantly chopping and changing their proposals over the last week ever since submitting their offers at last Wednesday's deadline as they scramble to satisfy a government that doesn't want to see job losses with the prospect of a general election looming. Fiat's original leaked plans foresaw around 18,000 jobs going at Opel and the furore of this caused it to take the unusual step of issuing a press release to say that the number was closer to 10,000, while briefing that only around 2,000 of these would come in Germany.

Also yesterday GM transferred all the plants, administration, patents and intellectual properties relating to Opel to Adam Opel GmbH, ending an 80 year marriage, and allowing any new buyer the freedom to acquire the concern. Only royalty payments (reportedly around 5 percent) have not been covered as yet. Economy Minister Karl-Theodor zu Guttenberg has said before that an agreement would need to be reached with GM in order to allow a trustee to be appointed. With parent company GM expected to be tipped into bankruptcy on June 1, this move paves the way for the German government to appoint a temporary trustee while it continues to find a buyer and also to hand over a bridging loan. GM bought Opel in 1929.

Prior to yesterday's evening meeting Frank-Walter Steinmeier, the German Vice-Chancellor and Minister for Foreign Affairs, said that he was confident that a bridging loan of 1.5 billion euros would be approved. The loan will allow Opel to continue its carmaking operations until a new buyer is chosen and is able to take over full responsibility. Management of the bridging loan would fall into the hands of the trustee. Finance Minister Peer Steinbrueck, was also asked if the cabinet would be able to agree to provide the bridge financing for Opel when the government met last night and he told ARD television: "It is quite possible. The time plan will depend on the decisions made in the United States on General Motors." Asked whether Germany was set on providing aid to Opel Steinbrueck said: "We’re interested in success, not in failure. We really want to rescue Opel and the jobs linked to it." Asked whether he believed it was realistic that Opel could be hived off from its parent company, GM, Steinbrueck said: "Yes, that’s what we’re hoping. We hope via this trustee scheme there’s a split between General Motors in the United States and GM in Europe with Opel as the main brand on top."

Meanwhile the European Commission has waded into the Opel sale. Günter Verheugen, the Vice-President of the European Commission responsible for enterprise and industry, is planning to call a meeting of industry ministers which will discuss the Opel issue. Belgium is particularly concerned that the Opel plant in Antwerp could be shut down as the German government - which is expected to give as much as 6 billion euros in state loans to help Opel's new buyer turn the company around - demands that most of the job losses fall outside Germany. As well as Belgium, factories in Poland, Spain and the UK could all be hard hit.