Kerkorian Makes Offer for Chrysler
The offer disclosed Thursday from Kerkorian's Tracinda Corp. is slightly lower than at least one competing bid from Canadian auto- parts supplier Magna International Inc., worth a reported $4.7 billion.
Tracinda said it would place a $100 million deposit for the right to exclusive bargaining rights.
Tracinda in a statement said it wants "to build and strengthen" the troubled automaker and "will offer the UAW and Chrysler management the opportunity to participate as equity partners in the transaction."
DaimlerChrysler shares climbed $2.96, or 3.7 percent, to $83.95 on the New York Stock Exchange after the announcement.
California-based Tracinda said its offer is subject to Chrysler reaching a new collective bargaining agreement with the United Auto Workers as well as a deal with DaimlerChrysler on sharing the unfunded pension liabilities and health care costs of Chrysler retirees.
A message seeking comment was left Thursday with a UAW spokesman.
Tracinda also said it's ready to start a more extensive review of Chrysler's financial books right away and believes it could complete it within 60 days.
Han Tjan, head of corporate communications for DaimlerChrysler in New York, said the German-American automaker is talking with partners about a sale and that the chairman is satisfied with the process.
"All of our options are still open. For us to talk about (Tracinda) is speculation," Tjan said.
At least two groups in addition to Tracinda and Magna reportedly have expressed interest in Auburn Hills, Mich.-based Chrysler. 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.
In a letter to DaimlerChrysler Chairman Dieter Zetsche, Tracinda said it has been following the developments at Chrysler closely and has been studying available materials about the automaker.
"Having been a major shareholder for over a decade we are very familiar with both Chrysler and the automotive industry, and have come to believe, all factors considered, that a private ownership approach is in the best interests of all Chrysler constituencies," said the letter, signed by Tracinda adviser Jerome York, a former Chrysler Corp. executive.
The letter said it would be easier for a privately owned company to take a long-term approach "to build Chrysler into a robust and lasting, stand-alone entity."
Kerkorian long has had interest in automotive companies.
Late last year he dumped the last block of what once was a nearly 10 percent share of General Motors Corp., the world's largest automaker.
He had Kerkorian pushed an alliance between GM, Nissan and Renault SA. GM's board voted to explore the idea of an alliance, but after three months of discussion the idea was scrapped. York served as Tracinda's representative on the GM board but stepped down after the alliance talks fell apart.
Kerkorian, whose wholly owned Tracinda was Chrysler's largest shareholder at the time of its 1998 merger with DaimlerBenz, sued the combined company in
2000. He claimed that DaimlerBenz engineered a takeover of Chrysler, then cheated him out of billions by casting the deal as a merger of equals. A federal judge rejected his claim.-- "I have tried to live my life so that my family would love me and my friends respect me. The others can do whatever the hell they please." John Wayne