At least six potential suitors including TRW Automotive Holdings have considered bidding for Delphi Corp, as the deadline for offers on the assets of the bankrupt auto parts maker approached, sources briefed on the matter said on Thursday.
Auto parts maker Federal-Mogul Corp, billionaire investor Wilbur Ross, and Delphi's bankruptcy lenders including hedge fund Elliott Management are considering bids that could compete with private equity firm Platinum Equity, the people said.
Livonia, Michigan-based parts supplier TRW has looked at Delphi's books but is unlikely to submit a bid on Friday, one source said.
Appaloosa Management, which backed out of a plan to support Delphi's emergence last year, had also considered a new bid, according to two sources, but was not expected to submit an offer, a third source said.
The people close to the Delphi sale process asked not to be identified because decisions on bids have not been finalized and the names of the potential bidders have not been released by Delphi or the U.S. Bankruptcy Court.
Representatives for Appaloosa could not be reached immediately for comment. Federal-Mogul, TRW Automotive, Elliott Management and Ross have declined to comment.
TRW is 45 percent owned by private equity firm Blackstone Group (BX.N). Blackstone has also been an advisor on Delphi's debtor-in-possession financing.
TRW bought a portion of Delphi's North American brake manufacturing business in late 2007 and has been seen as eager to broaden its automotive safety offerings.
Delphi's debtor-in-possession lenders, including Elliott Management, are considering a credit bid using the amount they are owed under Delphi's bankruptcy loan, sources said.
Sources said the bidders have been drawn to the potential for Delphi's international business, which has been kept out of the bankruptcy process.
Delphi, which was spun off from General Motors Corp (GMGMQ.PK) in 1999 and filed for bankruptcy in 2005, had agreed to sell most of its global operations to Platinum Equity in a deal brokered by the Obama administration.
But U.S. Bankruptcy Judge Robert Drain ordered Delphi in June to allow other bids that could compete with Platinum's offer, and set a Friday deadline for bids on Delphi.
Delphi has said there were several potential suitors but declined to identify them.
An auction will take place on July 17 if any other qualified bids are made. A hearing is scheduled for July 23 to approve the sale plan.
FOUR YEARS IN BANKRUPTCY
Delphi has struggled to exit bankruptcy since investors led by Appaloosa walked out of a $2.55 billion deal to support its emergence in April 2008.
But a severe slump in the global auto industry over the past year has depressed the value of automotive assets dramatically, allowing potential investors to make acquisitions at a much lower price, the sources said.
The four-year Delphi bankruptcy has been a cash drain for GM, which is now also operating in bankruptcy as it seeks to complete a sale of most of its assets to a new company funded by the U.S. Treasury.
As part of a deal brokered by the Obama administration's autos task force, GM would take over Delphi's steering business and four other U.S. plants.
The rest of the Delphi business, which includes its international operations, would be sold to Platinum in a $3.6 billion deal.
GM has agreed to provide $2 billion in funding to Beverly Hills, California-based Platinum, the automaker has said.
The Platinum deal for Delphi was negotiated with the involvement of U.S. officials at the same time that the autos task force was readying the June 1 bankruptcy filing for GM, court documents show.
GM executives said in court filings this week that after discussions with creditors and other prospective bidders, the automaker has determined Platinum is best equipped to lead Delphi out of bankruptcy.
But Delphi creditors have complained that the Platinum and GM transaction was negotiated in secret and would short change their interests.
The case is In re: Delphi Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 05-44481.
(Additional reporting by Kevin Krolicki and Caroline Humer; Editing by Tim Dobbyn)