Report: GM offer sparked talk of a sale
GM offered to give DaimlerChrysler an ownership stake in the company.
DETROIT (AP) -- General Motors Corp. offered to buy Chrysler Group in late January, prompting DaimlerChrysler AG to publicly discuss the idea of selling its struggling U.S. arm, according to a report published Monday.
The offer from the world's largest automaker remains on the table, but GM is a long-shot candidate to buy Chrysler, The Detroit News reported, citing people familiar with the situation that it didn't name.
The offer initially was rejected by DaimlerChrysler for being too low, the newspaper said. It said GM offered to give DaimlerChrysler a minority stake in GM stock of less than 10 percent. The newspaper said the proposal called for DaimlerChrysler to pay GM more than 1 billion to defray Chrysler's health care costs, then team up with GM to seek financial concessions for Chrysler from the United Auto Workers.
No comment
Chrysler spokesman Mike Aberlich had no comment on the report, and GM spokesman Tony Cervone repeated what the company has said since reports surfaced that his company is interested in Chrysler.
"We talk to automakers all the time about things of mutual interest. Often these talks don't lead to anything," he said.
DaimlerChrysler Chief Executive Dieter Zetsche first publicly floated the idea of a Chrysler sale. On Feb. 14, he said that all options were open for the U.S. operations, and he would not rule out a sale.
DaimlerChrysler's U.S. shares pushed to a new 52-week high Friday as speculation swirled that Canadian auto supplier Magna International Inc. and a private equity partner would bid for Chrysler. Monday, DaimlerChrysler's shares fell 1.16, or 1.4 percent, to 81.20 in morning trading on the New York Stock Exchange. GM's gained 26 cents to 32.25.
GM Chairman and CEO Rick Wagoner first discussed a Chrysler deal with Zetsche in December, but the offer was deemed inadequate, and DaimlerChrysler opened the bidding to others, the News reported. Wagoner and Zetsche have continued to meet, according to the newspaper, which also said other bids are expected this week from private equity firms.
Finances reviewed
Cerberus Capital Management LLC and a consortium of investors led by Blackstone Group each have reviewed Chrysler's finances and are expected to make bids.
All the reports have led to conflicting predictions from industry analysts on what might happen at DaimlerChrysler's annual shareholders meeting April 4 in Berlin.
London-based Brokerage Dresdner Kleinwort said it believed a decision was imminent and would likely be announced at the meeting. Referring specifically to GM, the brokerage said it did not see such a deal as a viable option because of what it said were structural problems and that it could result in thousands of North American jobs lost if the two companies partner.
But Efraim Levy, senior industry analyst with Standard & amp; Poor's, said in a note to investors that his firm predicts the most likely scenario is that DaimlerChrylser will keep Chrysler, but restructure it.