Magna ups the ante; raises GM's Opel bid

Canadian car-parts maker Magna has increased the amount of upfront capital it would inject into General Motors' European unit Opel, bringing the total proposed investment at about $713.9 million, a German government official said yesterday.

Magna and its consortium partner Sberbank of Russia are competing with two other bidders for Opel, which GM is being forced to sell after filing for bankruptcy in June (See: General Motors files for bankruptcy protection).

After a series of hectic discussions across the Atlantic, Magna was selected by GM as the preferred bidder for divesting a stake in Opel and a memorandum of understanding to this effect was signed by the two sides in June.

However, the deal sailed into troubled waters as Magna desires access to GM's global technology for its Russian partners on the deal (See: GM's Opel sale in trouble).

Belgian holding company RHJ International is also in advanced negotiations with GM over the acquisition of a stake in Opel (See: Belgium's RHJ nearer to Opel deal).

''Magna is now offering 350 million euros of its own capital immediately,'' said a government official, who is familiar with talks to find an investor for Opel. ''Furthermore, there should be a 150 million euro convertible bond.''