Billionaire Investor Kerkorian Offers $4.5 Billion for Chrysler
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Billionaire investor Kirk Kerkorian, rebuffed in a 1995 hostile bid for Chrysler Corp., offered $4.5 billion in cash to buy the money-losing automaker from Germany’s DaimlerChrysler AG.
The offer, through Mr. Kerkorian’s Tracinda Corp., would be subject to a new labor contract with the United Auto Workers and DaimlerChrysler’s willingness to share unfunded pension liabilities and retiree health-care costs, a Kerkorian adviser, Jerome York, wrote in a letter yesterday to the chief executive officer of Daimler-Chrysler, Dieter Zetsche.
Mr. Kerkorian’s offer is the first public bid for Chrysler since the German parent’s surprise February 14 announcement of a possible sale. Auto-parts maker Magna International Inc. has made an offer, buyout firms Blackstone Group LP and Centerbridge Capital Partners LLC made a joint bid, and Cerberus Capital Management LP plans to bid, people familiar with the talks said this week.
“This is a brilliant strategy to announce it publicly,” a Morgan Keegan & Co. analyst, Pete Hastings, said of the Tracinda offer. “It puts pressure on the other bidders and allows Kirk to appear as a white knight compared to the other private-equity bidders.”
Mr. York said that Tracinda wants to operate Chrysler, of Auburn Hills, Mich., as an independent entity. “Tracinda is confident it will be able to obtain the necessary funding for the offer,” he wrote.
