Updated from 1:19 p.m. EDTGeneral Motors ( GM) will begin a round of tough negotiations with bondholders this month, first making an offer it knows will fail and then threatening to spin off its most valuable assets into a separate company, according to a credit analyst's report. KDP Investment Advisors analyst Kip Penniman said he expects the outcome of negotiations with bondholders and the United Auto Workers will be a pre-packaged bankruptcy filing by June 1. The talks with bondholders will likely begin with a formal exchange offer from GM before April 30, Penniman wrote in a report issued Monday. "We expect the ownership stake offered to bondholders would be unattractive, maybe in the 20% range," he said. The offer "will fail, as designed, and set the stage for the next round of negotiations with bondholders." In the meantime, Penniman anticipates that Chrysler will seek bankruptcy protection, ramping up the pressure on bondholders. "GM will hope that Chrysler's filing and the low-ball offer will set a serious and productive tone for the next set of negotiations, (which will) turn towards a pre-packaged bankruptcy. We believe GM could achieve a greater than two-thirds reduction in its unsecured debt in a pre-packaged filing while negotiating significant concessions with the UAW." Penniman also views discussions of a strategy to spin off the best GM assets into a separate company as an effort to pressure bondholders for a settlement. "We simply do not believe the plan could be implemented quickly enough to avoid significant damage to GM's value," he said. "Claimants including bondholders, the UAW, retirees, suppliers and vendors would all exercise their legal right to voice their arguments and bog down the process."