German government minister reiterates willingness to talk to new bidders
11 June 2009

Magna's bid to buy Vauxhall/Opel has been thrown in to doubt once again, after Germany's economy minister announced that he had reopened the auction process.

At a press conference in Berlin Karl-Theodor zu Guttenberg and Lord Mandelson, the UK's business secretary, warned that they had received only a memorandum of understanding from Magna International and that they were keen to talk to other bidders.

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The German minister added that he was also in talks with an unnamed Chinese investor which had approached him in the past two weeks.

Lord Mandelson said: "It is impossible to predict conclusively if the memorandum of understanding that we have now will translate into final agreement. We hope it will. But, we also have to keep our mind open to alternatives if that memorandum of understanding does not convert into a final agreement. We are agreed on that."

It is not clear whether the claim is merely an attempt to exert pressure on Magna to complete the deal with the minimum of job losses and factory closures, or if other offers really are being seriously entertained. Fiat and Chinese car maker BAIC are said to be considering further bids.

Magna has agreed to pay 700 million Euros (£610 million) for a 55 per cent slice of Vauxhall/Opel and has handed over 300 million Euros (£250 million) of emergency funding to keep GM Europe afloat.

Magna bid to buy GM Europe was conditional on due diligence of both Opel and Vauxhall, which it is reported to have begun this week.

Lord Mandelson was in Berlin to meet with the German economy minister and with Magna. He is reported to have offered Magna state aid in return for job guarantees.

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