RHJ and Magna face off in bid for Opel

By Gernot Heller

BERLIN (Reuters) - Belgium-based investor RHJ International is offering 275 million euros ($388 million) for a majority stake in General Motors' Opel business in a last-ditch bid to beat early frontrunner Magna.

RHJ's non-binding offer document, entitled "Project Beam" and obtained by Reuters on Friday, foresees production cutbacks and pay cuts for staff at the carmaker, which GM is selling amid a slimming programme to restore profitability.

With the plan, RHJ hopes to outmaneuver Canadian auto parts group Magna International Inc, which secured the favorite's tag when it signed a memorandum of understanding with GM to acquire the Ruesselsheim-based group nearly two months ago.

Magna, backed by Russia's Sberbank, wants to use Opel to make an aggressive push into the Russian market.

RHJ plans a more traditional restructuring of Opel's European operations, which stretch from Germany to Belgium, Britain, Poland and Spain.

The pursuit of Opel is part of a broader consolidation of the car sector in Germany and beyond which was given added impetus by the global economic crisis.

Because Opel has been placed under the ownership of a trustee in which both GM and the German government have a stake, the process of deciding a suitor has become more complex.

Speaking at a news conference with Russian President Dmitry Medvedev near Munich on Thursday, German Chancellor Angela Merkel voiced support for the Magna plan.