By Anne Jolis and Christiaan Hetzner
WRAPUP 1: RHJ Intl confirms Opel interest, Qatar edges towards Porsche bailout.
RHJ International declared its interest in Opel on Monday and Qatar looked to be moving closer to a 7 billion euro bailout of Porsche, raising the stakes in the battles for control of both German carmakers.The German industry shake-up comes as carmakers the world over face a slump in demand, reduced cash flow and the prospect of further consolidation in an attempt to ride out the economic downturn.
RHJ stock fell 2.4 percent after the loss-making Belgian private equity firm said it was in "advanced talks" to buy a majority in General Motors' Opel, while Porsche shares jumped nearly 9 percent on reports of a debt-quashing tie-up with Qatar.
The comments by RHJ, which had previously refused to confirm its interest in Opel, could mean Canadian auto parts supplier Magna has lost its much-vaunted lead in the last stages of the race to buy Opel, with a signing expected by the end of this month.
"We felt we've reached advanced stages of negotiations, and we feel it is now appropriate to confirm these talks," RHJ spokesman Arnaud Denis said, declining to give further details.
Recently, RHJ said it was eyeing financial sector investments and would have 438 million euros in cash to spend as of July 22, when its sale of a small stake in Egypt's Commercial International Bank is finalised.
RHJ, whose annual loss doubled last year to 1 billion euros, is reported to require only 3.8 billion euros in state aid as part of a deal for a majority stake in Opel, against an expected request of 4.5 billion euros from Magna.
Both would likely cut the same number of jobs, but labour leaders and local politicians, who enjoy a say in the deal, have so-far backed Magna due to its long-term industrial concept and its experience in the industry.
Fellow suitor China-based Beijing Automotive (BAIC), which submitted a bid for Opel earlier this month, has asked for only 2.64 billion euros in aid.
BAIC is hoping Opel's technology will help it close the gap with larger Shanghai-based rival SAIC Motors, which is enjoying success with partners like GM and Volkswagen.
Yet BAIC's lack of size and doubts over whether it was capable of running a western European carmaker meant its offer met with a "very cool" reception in Berlin, according to one source close to the talks, and it is unclear why RHJ's bid would be viewed any differently.
Italian carmaker Fiat has also expressed interest in Opel, and found approval within the German economics ministry, but the indebted Italian carmaker has been unwilling to invest any cash as part of the deal.
Financial investors, such as RHJ, are generally met with suspicion in Germany, due to their reputation for piling debt onto companies and stripping assets, with private equity firms dubbed "locusts" by leading SPD politician Franz Muentefering in 2005.
As a result, RHJ has yet to receive much in the way of political or labour support. "Magna is still the best solution, the second best would be Fiat," Thuringia's Economy Minister Juergen Reinholz told Reuters.
Reinholz said on Monday he believed a deal with Magna and GM could be possible this month.
Sources close to the talks said, however, that some executives at GM have been pushing for a solution with RHJ since it was viewed as the simplest deal available and may even give GM a chance to buy back RHJ's majority stake at a later date.
Separately, investors from the Gulf are reportedly ready to step up their long-running interest in Porsche.
Over the weekend, media reports emerged that Qatar's Sheikh Hamad bin Khalifa al-Thani was close to a 7 billion euro deal to bail out the debt-laden company.
An industry source said on Saturday that Qatar was looking at acquiring nearly 25 percent of Porsche as well as purchasing the German carmaker's options package in peer Volkswagen, which would give it access to 20 percent of the voting stock and a blocking minority in Europe's largest carmaker.
"The fact that Porsche has an offer from Qatar is certainly positive news as it strengthens Porsche's negotiating position versus VW. However, we struggle to see a deal that really offers significant upside to the Porsche shares," Sal Oppenheim wrote to investors.
Elsewhere, Gulf investors from Abu Dhabi bought a small stake in US electric sports car maker Tesla from Daimler.
Aabar - the listed investment vehicle of the emirate's sovereign wealth fund IPIC - bought a 4 percent holding from Daimler, which reduced its stake in Tesla to almost 6 percent.
"We closed this deal with Daimler because I think this would benefit Daimler a lot," Aabar Chairman Khadem Al Qubaisi told Reuters on Monday. (Reuters)