April 11, 2007
The Quest for Chrysler
Over the last few weeks there have been a few bids put forth for DaimlerChrysler’s German automotive operations. In the upcoming week the bidders are expected to meet with executives from DaimlerChrysler to discus the various offers that are being proposed. Among the companies that are expected to be present among this meeting are Blackstone Group, Centerbridge Capital Partners and Magna International. However, one name that is not among the bunch is the Tracinda Corporation that made a 4.5 billion dollar bid and hoped to squeeze in as a potential candidate. It was noted, however, that many stipulations followed Tracida’s bid that could potentially make the bid less attractive. What is interesting about this situation is the fact that Tracinda, who is owned by Kirk Kerkorian has a history of challenging companies that oppose him in any way shape or form. Most sources have indicated that this will not be an issue and Chrysler will carry on with negations with the remaining companies.
Since it was announced that a possible sale of Chrysler could occur the stock has been up nearly 30 %. However a big issue that still may pose a problem in the eventual sale is the presence of a very strong labor union in Germany that could block or stall any potential deals. The stock currently trades at 83.18 and see it only falling in the next few weeks. With Chrysler currently in trouble and the fact that the stock has risen just on the idea of a sale, Chrysler is one stock that I would currently stay away from and just watch the current situation play out. For furrther financial news about Chrysler, please visit: DaimlerChrysler Financials.
Posted by jcip at April 11, 2007 11:11 PM