Opel in Wonderland

To borrow a line from Alice's Adventures in Wonderland, the bidding war for Opel is getting "curiouser and curiouser."

Over the weekend came news that Belgian holding company RHJ International is readying an improved offer for the carmaker that would require 3.8 billion euros ($5.3 billion) in government guarantees and would cut about 10,000 Opel jobs across Europe.

What's behind RHJ's new offer?

Some reports say that the equity group will implement tough cost cuts at Opel to make it profitable. That's what equity groups are good at. In a few years when Opel hopefully is making money, RHJ will sell the brand back to its current parent General Motors.

GM tried to persuade its favored Opel bidder, Magna International, to agree to a buyback clause. Magna and the German government, which is keeping Opel alive with 1.5 billion euros in state aid, said a firm no.

On Sunday, Germany's biggest newspaper Bild reported that GM's lead negotiator, Jim Smith, has been holding discussions with RHJ with the aim of getting a deal done this week.

German politicians and Opel's unions are not impressed with GM's negotiating tactics. They have repeatedly said that Magna's offer is the best and a deal should be signed as soon as possible to stop Opel from draining more taxpayers' money.

Magna's Russian partner, state-owned lender Sberbank, is even less impressed.

Sberbank CEO German Gref said talks with GM are extremely difficult. "A company which goes into bankruptcy, then two days later tells us repeatedly how business works is not very credible," he said in Berlin recently.

But maybe GM will have the last laugh. Consider this scenario: GM has RHJ carry out the cost-cutting at Opel that the U.S. automaker had no stomach for. Then GM gets Opel back after the European car industry has recovered from the current crisis.

Not so curious after all.

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