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As 4,312 hourly Chrysler workers in Canada and the US accepted early retirement and buyout plans, Kirk Kerkorian released a statement again asserting his desire for a "true partnership" with the UAW and Chrysler management that would entail "equal sharing in the 'risks and rewards'" of a sale to his company, Tracinda. While acknowledging that a successful purchase by Tracinda couldn't (or at least, shouldn't) happen without all parties involved welcoming the deal, Kerkorian calls his plan for the company a "transformation" and claims that it takes everyone's best interests into account.

As expected, his public jump into the foray has flushed more details out from other bidders. Magna International, the parts supplier, had apparently registered a bid of $4.7 billion, and according to UAW President Ron Gettelfinger the other bidders have already approached the UAW about equity partnership. The UAW has not yet talked to Tracinda, and he made no comment about whether the union even wants to be an equity partner. With respect to all of the bidders, it is unclear how much the union would be expected to give up in wages and health care in return for just how many board seats and just much equity ownership. With new labor contract negotiations coming up, the UAW has quite a number of possible outcomes to consider.

DaimlerChrysler and its investment adviser, J.P. Morgan, will open deeper discussions with bidders next week.

[Source: Detroit News]

Tracinda, billionaire investor Kirk Kerkorian's company, sent two letters today, one to DaimlerChrysler's CEO Dieter Zetsche and the other to the Supervisory Board, detailing an offer of $4.5 billion in cash to buy the Chrysler Group. Kerkorian, who has been major Chrysler shareholder for more than ten years, tried to buy the company in 1995 with Lee Iaccoca but met with rejection, and following that was a factor in the DaimlerChrysler merger. Sensing a second opportunity, he has done his usual and placed himself squarely in the middle of things.

The letter to the Supervisory Board details that the offer, which would not need to be financed, would be contingent on "reaching a new satisfactory collective bargaining agreement" with the UAW, and sorting out an "equitable arrangement" with DCX on pension liabilities and health care costs. To show the seriousness of its intentions, Tracinda offered $100 million to be the exclusive negotiating partner and receive "exclusive right to conduct due diligence for 60 days." Barring any hidden surprises, if Tracinda decided not to follow through with the sale, DCX would keep $25 million. In what might be an attempt to get the UAW and Chrysler execs on its side, Tracinda points out that it would partner "with the UAW and senior management of Chrysler" and offer them "the opportunity to participate with Tracinda as equity partners in the transaction." Of course it's impossible to say what that would really mean if a sale were to occur, but at the very least it might compel the other bidders to make some sort of statement about their intentions in that regard.

[Source: Autonews]