Kerkorian Offers $4.5 Billion for Chrysler

[Made In the USA]

Billionaire investor Kirk Kerkorian is proposing to pay $4.5 billion in cash for Chrysler, as parent DaimlerChrysler AG examines what to do with its troubled U.S. automaking arm.
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A deal would put Kerkorian in charge of Chrysler a decade after he claims he was tricked out of a potential billions of dollars in the 1998 deal in which Germany's DaimlerBenz combined with 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.

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[No Boss]

Quoted, from another site, for truth:

So, Daimler-Benz bought them for $37b in 1998 and he's offering them $4.5b in 2007? Hmm. Yea, that's about right for the resale value of a Chrysler product.

[teletubby-warrior]

According to my local news, he offered Chrysler ~$40 billion in '95 and they rejected his offer.

[anTo]

lol if he gets it now for less 5 bill thats a deal! oh wait, in the state that chrysler is in now... nvm

[Jacobfox]

I bet he'll get screwed over again, just like last time.
Still, chrysler can't complain, somebody wants their shit.

[Shawn]

Awesome. Does this mean new Chyrslers will be shipping with gambling software on the satnav? Keno at least?

[cvrefugee]

Is this the guy that helped people kill themselves back in the '90s?

[Shawn]

No, that was Kevorkian. This is Kerkorian, owns a lot of the resorts in Vegas. They sound similar though, I think they're both Armenian names.

[Blind_Io]

Actually with the state of Chrysler right now Dr. Kevorkian might be the best thing for them.

My parents just had to rent a car and they ended up with a Sebring. My dad actually sent me photos he took of the car to show me the lousy construction. The engine was a whining little underpowered 4 cyl, way too small for a car that size. All it really did was make noise when you press the gas.

[jayhawk]

Originally Posted by teletubby-warrior

According to my local news, he offered Chrysler ~$40 billion in '95 and they rejected his offer.

...And offered up around 20 billion 5 years ago. So yeah, the company as a whole depreciates like a Chrysler.

[un-dee]

Wait wait, he wants to PAY money for Chrysler? Sell it! They won't get that chance ever again.

[Donington]

Four blokes from Dudley could offer them ten quid for it