GM offered Daimler GM stock in Chrysler bid: report
Mon Mar 26, 12:59 PM ET
DETROIT (Reuters) - General Motors Corp. (NYSE:GM - news) offered DaimlerChrysler AG (DCXGn.DE) a stake of less than 10 percent of its own stock in an early, "longshot" bid to acquire Chrysler Group, the Detroit News reported on Monday.
GM's bid for Chrysler, which was made in January before Daimler opened discussions with a range of bidders, did not include a cash transfer to Daimler, the newspaper reported.
GM's offer remains active as other bidders prepare to tender their own offers for Chrysler this week, but unnamed sources close to the sale process consider it a "longshot," the paper said.
GM has been in discussions with Daimler about an acquisition of Chrysler and on other areas of cooperation, including vehicle development, people familiar with those talks have said.
But the Detroit News report marked the first time that details of the GM offer for Chrysler have been reported.
Han Tjan, a spokesman for DaimlerChrysler, declined to comment.
Tony Cervone, a GM spokesman, declined to comment on the report, saying only that the automaker had frequent discussions about areas of potential cooperation with other companies in the industry. "Often they don't lead to anything," he said.
The Detroit News said GM had asked for more than $1 billion from Daimler to defray Chrysler's health-care costs and sought cooperation in negotiating concessions from the
United Auto Workers Union.
GM also offered Daimler an equity stake of less than 10 percent of its own stock, the newspaper said.
Chrysler, the No. 4 U.S. automaker and home to the Jeep, Chrysler and Dodge brands, was put into play in mid-February, when DaimlerChrysler Chief Executive Dieter Zetsche announced that the company was keeping all options open for the unit.
The Detroit News reported that Daimler rejected GM's initial offer for Chrysler as too low, a move that prompted Zetsche's announcement of a potential sale.
GM Chief Executive Rick Wagoner had first discussed a deal to acquire Chrysler with Zetsche in December, the Detroit News said, quoting unnamed sources.
Last week, analyst Bret Hoselton of KeyBanc Capital Markets said that auto supplier Magna International (Toronto:MGA.TO - news) had joined with an unnamed private equity partner to offer to acquire Chrysler for $4.7 billion.
Daimler is looking to get initial bids from potential buyers before the end of the month and ahead of an April 4 shareholder's meeting in Berlin.
Daimler executives are expected to be pressed for an update on progress in the Chrysler sale but are unlikely to offer new details, a person close to the process said.
Other private-equity bidders for Chrysler include Cerberus Capital Management and an alliance between Blackstone Group and Centerbridge Partners, people familiar with the talks have said.
Cerberus has reportedly hired former Chrysler Chief Operating Officer Wolfgang Bernhard as an adviser.