RHJ International said it is in advanced talks to buy Opel while Qatar looked to be moving closer to a 7 billion euro bailout of Porsche , raising the stakes in battles for control of both German carmakers.
The industry shake-up comes as carmakers around the world face a slump in demand, are burning through cash and are looking to the prospect of further consolidation to help them to ride out the economic downturn.
Sources familiar with the matter said on Monday GM negotiators believe their bargaining position has changed for the better now the U.S. carmaker has emerged from bankruptcy protection with substantially lower debt.
Managers at GM may be hoping the U.S. Treasury -- its largest shareholder -- would back plans to sell a stake to RHJ, instead of to Magna and its Russian-backed consortium that has been heavily favoured to date.
The Belgian-based group could then carry out a comprehensive restructuring, finding an excuse to close the three surplus assembly plants only to sell back its stake in Opel afterwards to GM, which wouldn't have to get its hands dirty with measures it would have found politically difficult or impossible to implement itself.
The suspicion is that RHJ as a financial investor would act the interest in GM and quickly flip it back to them, said Armin Schild, a union leader who sits on Opel's board said.
GM had not originally intended to give away majority control but was forced to do so since the company could no longer finance Opel and needed state loan guarantees to keep it afloat. Berlin in exchange demanded independence for Opel.
RHJ stock initially fell nearly 3 percent after the Belgian private equity firm said it was in advanced talks to buy a majority in Opel, only to close up moderately.
Elsewhere Porsche shares jumped nearly 10 percent on reports of a debt-quashing tie-up with Qatar.
The comments by RHJ could mean Canadian auto parts supplier Magna has lost its much-vaunted lead in the last stages of the race to buy Opel, with a signing expected by the end of this month.
We felt we've reached advanced stages of negotiations and we feel it is now appropriate to confirm these talks, RHJ spokesman Arnaud Denis said, declining to give further details.
RHJ, whose annual loss doubled last year to 1 billion euros, is reported to require only 3.8 billion euros in state aid as part of a deal for a majority stake in Opel, against an expected request of 4.5 billion euros from Magna.
Both would likely cut the same number of jobs, but labor leaders and local politicians, who enjoy a say in the deal, have so-far backed Magna due to its long-term industrial plans and its experience in the industry.
We conceded privileged status to Magna in the bidding process for good reasons and nothing has changed since, Hesse's conservative state premier Roland Koch told a press conference.
Fellow suitor China-based Beijing Automotive (BAIC), which submitted a bid for Opel earlier this month, has asked for only 2.64 billion euros in aid.
BAIC is hoping Opel's technology will help it close the gap with larger Shanghai-based rival SAIC Motors <600104.SS>, which is enjoying success with partners such as GM and Volkswagen .
Yet BAIC's lack of size and doubts over whether it was capable of running a western European carmaker meant its offer met with a very cool reception in Berlin, according to one source close to the talks, and it is unclear why RHJ's bid would be viewed any differently.
Italian carmaker Fiat SpA has also expressed interest in Opel and found approval within the German economics ministry, but the indebted Italian carmaker has been unwilling to invest any cash as part of the deal.
Financial investors such as RHJ are generally met with suspicion in Germany, due to their reputation for piling debt on to companies and stripping assets. As a result, RHJ has yet to receive much in the way of political or labor support.
Magna is still the best solution, the second best would be Fiat, Thuringia's Economy Minister Juergen Reinholz said.
Reinholz said on Monday he believed a deal with Magna and GM could be possible this month.
Sources close to the talks said, however, that some executives at GM have been pushing for a solution with RHJ since it was viewed as the simplest deal available and may even give GM a chance to buy back RHJ's majority stake at a later date.
Separately, investors from the Gulf are reportedly ready to step up their long-running interest in Porsche.
Over the weekend, media reports emerged that Qatar's Sheikh Hamad bin Khalifa al-Thani was close to a 7 billion euro deal to bail out the debt-laden company.
The fact that Porsche has an offer from Qatar is certainly positive news as it strengthens Porsche's negotiating position versus VW. However, we struggle to see a deal that really offers significant upside to the Porsche shares, Sal Oppenheim wrote to investors.
(Additional reporting by Thomas Atkins in Dubai; Editing by Simon Jessop and David Holmes)