A David-and-Goliath takeover offer for the German factories of General Motors sent the share price of the bidding company, SolarWorld, crashing 16 per cent lower Wednesday, Nov 19 as GM rejected the one-billion euro bid.
SolarWorld, which assembles and installs smaller electricity generating systems that rely on wind or the sun, asked GM to give it four factories, a German research centre, the Opel brand and 1 billion euros ($1.25 billion).
The Bonn-based company said it would inject an additional 1 billion euros of its own cash and loans to convert Opel into "Europe's first green automobile maker," designing cars with low- emission engines.
GM dismisses bid, says Opel is not for sale
US-based General Motors promptly rejected the bid. In Detroit, a GM spokesman said Opel was not for sale and claims otherwise were "pure speculation."
GM, the world's biggest automobile manufacturer, took over the Adam Opel company 80 years ago.
SolarWorld AG, based in Bonn, Germany, demanded a dowry from General Motors of 40,000 euros for each Opel employee it took over, amounting to "compensation" of one billion euros.
SolarWorld offered to invest 250 million euros cash in the takeover and raise 750 million euros in bank loans, provided the banks were given a federal government guarantee for the sum.
As of early afternoon, SolarWorld stock was trading at 13.66 euros, down 16 per cent from Tuesday's close in Frankfurt.
A German government spokesman declined substantive comment on the call for guarantees, saying there was nothing to discuss unless the two companies actually opened negotiations.
SolarWorld chief executive Frank Asbeck said it was a serious offer. His company had 1 billion euros in reserve, he added.
Opel fears based on ailing parent company shares
General Motors has seen its share price plunge amid bankruptcy fears. Opel has asked for German state aid, but German politicians have been reluctant to help in a way that indirectly benefits the parent.
SolarWorld has a payroll of 2,254 people. Opel, with its main office in a Frankfurt suburb, has more than 10 times as many.
Opel was not in a position to immediately give a reaction to the SolarWorld statement, a spokeswoman told reporters.
The German automaker has been hit by slumping sales and financial problems at its parent company, and has asked the German government for loan guarantees in the event it can no longer obtain financing from GM.
EU commissioner calls Opel a "special case"
As the discussion about state aid for the ailing German carmaker Opel continued, EU Industry Commissioner Guenter Verheugen described the firm as a "special case" in Europe.
"Extraordinary circumstances require extraordinary measures," Verheugen said in the European Parliament in Strasbourg on Wednesday; although he went on to say that he was not fully decided about the proposed multibillion-euro aid package from the German government.
However, he said it was "in no-one's interest" that Opel be allowed to fail. Opel would be a competitive firm, Verheugen said, were it not for the critical situation of Opel's US parent company, General Motors.
The European Commission is working on a proposal for a stimulus package for environmentally friendly vehicles.
At the same time the European Investment Bank (EIB) is considering a 40-billion-euro loan for makers of low-emission cars.