Chrysler Seems Hesitant about IPO — UAW, Board & Banks Mull Price

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The Wall Street Journal

Chrysler Seems Hesitant to Come Out with IPO—Dealer’s Concerned?

AIN Editorial Positioning:

The whole problem that is causing the delay of the IPO is apparently the uncertainty about what the Initial Public Offering price ought to be. Plus, apparently the Board and Marchionne are working on bringing the UAW on board and buying out the remainder of the stock.

So— then there is the issue of the conversion of Chrysler from a limited liability company to a full blown corporation may be muddying the IPO waters with the IRS giving Chrysler mixed signals. Furthermore, the United Auto Workers Trust that owns 41.% of the company has to be involved in the final pricing of the IPO Stock Sales.

Worse yet is that Marchionne is apparently somehow opposed to the whole idea of the IPO because he and Fiat think that the stock sale will affect the deal with the United Auto Trust group and the price that Fiat has to pay for Chrysler.

Chrysler hopes to gain as much as $2B from the IPO. That would make the value of Chrysler somewhere between $9B to $13B.

Dealers with Chrysler stock should do well, and may have the inside track to buy more stock as the eventual IPO comes down.

 

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