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Report: Magna, un-named equity firm to bid on Chrysler Corp.


DetroitNut90

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Canadian auto supplier Magna International Inc. and a private equity partner have made a bid to buy the Chrysler Group for about $4.7 billion, according to an analyst report sent early this morning by KeyBanc Capital Markets. DaimlerChrysler stock rose $3.40, or 4.38 percent, to $81.01, to a 52-wek high in morning trading on the New York Stock Exchange. It has traded in a 52-week range of $45.98 to $77.99. “Our sources indicate DaimlerChrysler is very interested in divesting itself of Chrysler,” KeyBanc auto analyst Brett Hoselton wrote in the report. “While MGA views its offer as low and unlikely to prevail, the Company also sees it as an opportunity to purchase an inexpensive stake in the automaker should other bidders retreat.”

The note did not name the private equity partner but said its sources indicated Magna had talked with the Blackstone Group and Cerberus Capital Management, private equity firms considered by many industry experts as the leading contenders to buy the Chrysler Group. Magna and the private equity partner have already written a joint letter of interest with the bid to DaimlerChrysler, according to the note. Magna would take a 20% to 25% stake in the deal.

Detroit Free Press

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I'm gonna say it's Cerberus:

Wolfgang Bernhard, the restructuring expert who helped to turn around Chrysler five years ago, has signed an advisory contract with Cerberus Capital Management, signficantly strengthening the private equity group's hand in the bidding for the US carmaker.

Mr Bernhard, who was chief operating officer at Chrysler, signed the contract for a full-time role recently, according to several people familiar with the situation. The advisory mandate further helps the chances of Cerberus, already one of the favourites to buy Chrysler from DaimlerChrysler (NYSE:DCX) , its German parent.

http://us.ft.com/ftgateway/superpage.ft?ne...8095&page=1

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It is starting to seem less likely GM will be buying Chrysler.

I still think there is a strong possibility that GM will be in some way involved with Chrysler Group though and I wouldn't be surprised if they make a bid.

Nope, I heard on the radio last night that GM has withdrawn any attempt to buy out Chrysler Group. I guess the Canadian bidder seems like the most likely choice.

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Am I missing something? $4.7 billion only buys a quarter of the company? Is that Daimler-Chrysler or only Chrysler? I thought that Chrysler was in play for around 2-3 billion for the entire company. After all, if Ford is only worth $8 a share, what would Chrysler on its own be worth?

Magna isn't stupid. For $5 billion I would want a lot more.

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Am I missing something? $4.7 billion only buys a quarter of the company? Is that Daimler-Chrysler or only Chrysler? I thought that Chrysler was in play for around 2-3 billion for the entire company. After all, if Ford is only worth $8 a share, what would Chrysler on its own be worth?

Magna isn't stupid. For $5 billion I would want a lot more.

"Canadian auto supplier Magna International Inc. and a private equity partner have made a bid to buy the Chrysler Group for about $4.7 billion"

From what the article says, $4.7bn is the selling price of the Chrysler Group: Magna gets a 25% stake in the company.

What no one except the deal insiders know is exactly what assets and liabilities will be divested from the current company. And that is essential in forming the transaction price! Also, value per share is meaningless to us outsiders at this point: we don't know if the new Chrysler Group will be privately held or if they'll float some shares in the stock market.

Edited by ZL-1
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