Federal-Mogul Corp is readying a renewed bid for the assets of Delphi after breaking off talks with the parts maker – bankrupt since 2005 – late in May, three people with knowledge of the situation have said.

Federal-Mogul, controlled by billionaire investor Carl Icahn, had discussions about buying all or part of Delphi before the supplier agreed to sell most of its global operations to private equity firm Platinum Equity, the sources told Reuters.

Federal-Mogul is now considering a second try at Delphi after US bankruptcy judge Robert Drain ordered Delphi to allow other bids that could compete with Platinum’s offer, the sources said.

One source told the news agency Icahn and Federal-Mogul had not made a final decision to move ahead with a Delphi bid because it was not clear they would be able to match the terms of the government-brokered Platinum offer.

GM, now emerging from bankruptcy with US$50bn of US government financing, had agreed to provide $2bn to Platinum.

Citing court documents, Reuters said the Platinum deal for Delphi was negotiated with the involvement of US officials at the same time that the White House-appointed autos task force was readying the 1 June  bankruptcy filing for GM.

Delphi creditors have complained the Platinum and GM transaction was negotiated in secret and would short change their interests.

Any Federal-Mogul offer for Delphi would be aimed at its international operations and car electronics units, which are considered its most valuable assets, the sources told the news agency.

Drain has set a Friday (10 July) deadline for bids for Delphi and an auction will take place on 17 July if any other qualified bids are made. A 23 July hearing is scheduled to approve the sale plan.

Delphi spokesman Lindsey Williams told Reuters there were several potential suitors but declined to identify them.

Other sources told Reuters last week that billionaire investor Wilbur Ross was among those considering a bid for Delphi’s assets.

Hedge fund Elliott Management is also preparing a credit bid for Delphi based on the over $3bn of bankruptcy financing extended to the supplier, Reuters added.

It noted that, as part of a deal brokered by the White House-appointed autos task force, GM would take over Delphi’s steering business and four other US plants employing workers represented by the United Auto Workers union, hoping to protect itself from the risk of a supply disruption from its former supplier.

The rest of the Delphi business, which includes its international operations, would be sold to Platinum in a $3.6bn deal.