A Malaysian government minister on Monday confirmed that General Motors is interested in state-controlled Proton Holdings.

According to Reuters, comments by second financial minister Nor Mohamed Yakcop, which confirmed weekend newspaper reports that GM may bid for the loss-making automaker, pushed Proton shares up as much as 10% to a 13-month high.

The Business Times said on Saturday that GM was prepared to offer as much as 10 ringgit ($US2.85) for each share, a premium of nearly 50% to Monday’s price and valuing the Malaysian firm at $1.6bn, if the US firm is given control of Proton’s finances and manages its vendor system, the news agency added.

One analyst reportedly said the price was too high given Proton’s current poor financial state while the minister was said to have added that PSA Peugeot Citroen and Volkswagen were also interested in Proton.

“Let me put it this way; GM has shown interest in Proton, and if they put in a bid we will consider it,” Nor Mohamed told Reuters, adding: “There are three of them now who are foreign companies that are interested and they come in different forms and proposals. Now we are finalising the discussions and the comparisons, they are not identical interests.”

Reuters cited the paper as saying GM planned to submit a bid for Proton this week, quoting sources familiar with GM’s operations in Malaysia.

Proton’s state-of-the-art production facility in Tanjung Malim, could be a key attraction to GM, an analyst told Reuters.

He doubted GM would want to make cheap car parts in Malaysia because China was more competitive.

“It’s a lot cleaner to come in at manufacturing level, where it’s not just about the cheapness. It’s also about the plant configuration, flexibiltity and the efficiency, which is superior to Thailand or China ” he told the news agency, though other analysts said Malaysia could offer GM, Peugeot Citroen and Volkswagen a cheaper production base.