DaimlerChrysler ignoring Kerkorian bid?
Is DaimlerChrysler deliberately snubbing Kirk Kerkorian? Word has it the company is sending one of its top executives to New York to meet with potential buyers, but Kirk isn't on the list. Kerkorian, as you may know, has already made a $4.5 billion offer for Chrysler.According to the Wall Street Journal, DaimlerChrysler's Rudiger Grube is set to arrive in New York on Wednesday, but Kerkorian's Tracinda Corp. isn't on the itinerary. Companies that have made the list include Blackstone Group, Centerbridge Capital Partners LP and Cerberus Capital Management LP. Grube should also be meeting with reps for Canadian auto-parts supplier Magna International Inc. and private-equity firm Ripplewood Holdings Inc.
Kerkorian's absence could be explained by the fact that his offer is reportedly much lower than the others. That and the fact that it came with a laundry list of conditions, including that DaimlerChrysler would still be on the hook for pension and health care responsibilities for Chrysler. There's also the matter of the offer being opposed by labor unions. Even with all of that, The Wall Street Journal report said DaimlerChrysler wouldn't discriminate against Kerkorian, if he improves his bid.
[Source: The Wall Street Journal via EarthTimes.org]
Reader Comments (Page 1 of 1)
benp 3:39PM (4/11/2007)
If the next lowest bid is supposedly 8 Billion, there is a good reason DC are ignoring it. Kerkorian was hoping for the unions to make a stink about the purchase, but we have not seen that. His bid was doomed to fail as soon as he made it.
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Don 4:00PM (4/11/2007)
Ha! Excellent news! People are stupid to Kerkorian's goings-on...they know this guy isn't interested in long term success with Chrysler...just short term profits.
And he WILL screw the UAW.
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lawstud 4:21PM (4/11/2007)
I think the board has a legal and fiduciary duty to consider the highest offer because they owe the stockholders a duty to make the most money.
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whofan 5:37PM (4/11/2007)
What drives a man like Kerkorian? If I were his age with his money I`d enjoy myself not worry about making more of what I can`t spend due to my own mortality.
Diamler said they want Chrysler to go to good home. Thats honorible on there part. I want Chrysler to survive. I have my fingers crossed.
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Arnie 5:51PM (4/11/2007)
Usually private corporations can reject any bid on any terms. Besides that, there ways around having to accept the highest bid. This may be done by eliminating the bidders you don't like for the second round and thus preventing them from raising their bids. Alternatively they can sell stockholders the reasoning that a lower bid may be better in the long term. It will for example not benefit the image of Daimler-Benz in the US to leave Chrysler in the hands of a slash'n burn investor and as we know, image is money. Stockholders may buy that kind of reasoning, especially because they are eager to get rid of Chrysler. Also, there are a lot of conditions for accepting a bid, not only price. The seller determines what those conditions are. "Not selling someone who has sued us" can be a legit condition.
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whathe? 11:48PM (4/11/2007)
Kerkorian and Jerry York must think the rest of the shareholders are as dumb as DCX management. Just because Chrysler management found a way to take the value of the company from 38 bil. in 98 to less than a fourth of that now takes some doing. You'd have to be working overtime trying to lose money to squander that much that fast.
He didn't make his billions being a nice guy and everyone knows it. Evidently, he knows how to make money better than the gang who can't shoot straight managing the company now.
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Avinash machado 2:08AM (4/12/2007)
I think I was the one who tipped Autoblog about this.
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