Chrysler sale update: Wall St. more interested than automakers
Since Daimler Chrysler CEO Dieter Zetsche declared 'all options are open' with regards to a possible Chrysler sale, the rumors have been flying. With the exception of GM and Magna, every automaker that comes up as a potential suitor has politely denied the rumor. VW, Hyundai, and Ford have all denied interest in Chrysler, and the Chinese automakers haven't exactly gotten in line to throw their names in the hat.
Surprisingly, over the past few weeks Wall St. has shown some of the strongest interest in the Chrysler brand. Blackstone Group, an investment company with a whopping $125 billion in its corporate war chest, has emerged as one of Chrysler's potential suitors. In fact, the company was already given access to confidential business data about Chrysler.
Blackstone already has seen success in the automotive sector with a 56% ownership in TRW and a stake in American Axle. Another investment firm that has been eying Chrysler has been Cerberus. The company leads a group of investors looking at bankrupt Delphi and they already own a 51% stake in GMAC.
[Source: Detroit News]
Many automakers are just trying to survive right now because of intense competition and pressure from Wall Street. Buy a struggling company and watch your stock take a dive. Notice ever since the Chrysler sale news hit the street Daimler stock has skyrocketed. We wonder what would happen to Blackstone or Cerberus stock if they obtain Chrysler. One thing is certain, though. If it is taking this long for the Aston Martin sale to be completed, we think a Chrysler sale may take the rest of the decade.
Get a WordPress.com Blog
Reader Comments (Page 1 of 1)
Donald Hindle 8:40AM (3/05/2007)
Buy the company, get Daimler at least partly on the hook for pension and ex-employee healthcare, make the UAW an offer they can not accept at the next contract, sell the bits and pieces. Sure it'll speed up the economic devastation of the Upper Midwest but they're in New York so what do they care?
Reply
Michael Karesh 10:02AM (3/05/2007)
I'm much less hopeful about the domestic auto industry's future than I was a few weeks ago. First Ford's senior managers seemed clueless in Chicago. Now we learn that not only does DCX do a poor job selling cars, but they also do an awful job selling the Chrysler half of the company. Much of the press is about how few people want to go anywhere near it. That's going to do wonders for the final selling price.
It might take a rebate to move this one off the lot. $5 billion rebate, but hurry up and buy because the rebate is only good for purchases through March 31st!
Reply
jamie 10:51AM (3/06/2007)
So, I wonder what Kirk Kerkorian is thinking now?
Actually with bargain basement "K-Mart" pricing Chrysler is a really good buy for somebody with a game plan.
I hope GM gets off their collective keesters and scotches this deal before anyone with abundant moneybags drops a trailer full of greenbacks on Dieter's doorstep.
If GM can successfully merge Chryco with GM platforms, then Billy Bob Ford will have to throw in the towel also, thereby making the American auto industry what it should be by now...ONE COMPANY with a number of independent divisions. Think of the synergies!!!
Reply
Lithous 11:50AM (3/05/2007)
So, would it be a plus or minus for a company like Blackstone Group to get 51% and GM 49% (or something close to that) such that GM's vehicle building could be leveraged by a company that has cash and possibly good management? Or do you think that these "wall street" companies would want to go solo?
At first thought I kinda like the idea. If anything happen to GM Blackstone would be able to buy out GM's share easily and for a decent price.
Reply
Stéphane Dumas 3:44PM (3/05/2007)
Lithous idea is very interesting posibility. It will be less risky for both GM and Blackstone if everything don't go well as they originaly planned.
Michael Karesh, you should add Lithous idea on your blog ;-)
I'm a bit intrigued then Blackstone and/or Cerberus aren't interested to Ford...yet.
Reply
Barney 12:29AM (3/06/2007)
Daimler shares go up on the mere suggestion of tossing off Chrysler. Any buyer will certainly be testing the waters with their own shareholders. The ploy is good though. Chrysler is now the center of attention and everyone is in the guessing game. Daimler just has to sit and wait for the highest bidder.
Reply
AAM 11:30AM (3/22/2007)
Since everyone is throwing wild & creative ideas, why not nationalize both Citgo AND Chrysler. The fed have shown already they like big business, & the world already hates us. Since everyone else in the world nationalizes our companies contracts for the last 100 years [basically stealing our companies money] maybe we should give them a taste of their own medicine. This nonsense has already cost the French & Germans alot of cash from my home just in lost sales. Is it just me or do the Japanese seem to be the only REAL ally we have in the world? Toyota seems to be opening more factories than the Germans are closing!
Reply