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eneral Motors will swap 10 percent of its stock to acquire the troubled Chrysler Group from DaimlerChrysler AG, according to inside reports.
Since the German-based automaker, also known as DCX, announced that "all options are on the table," last month, a number of potential suitors have been looking at the possibility of acquiring Chrysler, including GM.
But a report in the Monday issue of the Detroit News said General Motors first broached the idea of an acquisition last December. The paper outlined some of the details of what it said was an initial, "longshot" offer, made by GM, even before DaimlerChrysler CEO Dieter Zetsche's formal announcement.
As part of that package, the News reported, GM would give a 10 percent stake of its own share in return for Chrysler. But the U.S. automaker's bid also would have required DCX to come up with $1 billion to help defray Chrysler's huge health care costs.
Daimler Says "No Deal"
The bid was quickly rejected and since then, a number of other potential suitors have joined the fray, including the Canadian-based mega-supplier, Magna International, and several private-equity giants, including Cerberus Capital Management, and a possible partnership between between the Blackstone Group and Centerbridge Partners.
According to KeyBanc Capital Markets analyst Bret Hoselton, the Magna bid would be worth $4.7 billion, and other analysts have put the potential price tag for Chrysler in that general range, but analysts have also warned that Chrysler's various health and pension liabilities might completely offset the value of its factories and other assets.
Where things stand remains unclear, and the Reuter's news service quoted GM spokesman Tony Cervone cautioning that such proposals "Often…don't lead to anything."
Germans marking time
DCX insiders say the German manufacturer hopes to have all bids in hand by the end of March, giving the company time to analyze its options before its annual shareholders meeting, in Berlin, on April 4th.
While TheCarConnection.com has been told by numerous DaimlerChrysler executives that a sale is a strong option, backed by many large shareholders and senior board members, Zetsche has made it clear he will look at other alternatives.
These could include a more limited alliance, like the one between France's Renault and Japan's Nissan. Or DCX might ultimately conclude that the best approach would be to simply hang tight and give Chrysler the chance to implement the turnaround plan it laid out earlier this year.
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, Tue, 27 Mar 2007 14:01:17, Wed, 28 Mar 2007 10:57:44
, Wed, 28 Mar 2007 21:19:43, Wed, 28 Mar 2007 12:09:11
, Thu, 29 Mar 2007 18:06:17, Tue, 27 Mar 2007 03:11:14
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