Cerberus may win bid for Chrysler
By ASSOCIATED PRESS
Published May 14, 2007
DETROIT - Private equity firm Cerberus Capital Management LP likely will be the winning bidder to buy Chrysler Group from DaimlerChrysler AG, and an announcement could come as early as today, a Chrysler official said Sunday.
The official spoke on the condition of anonymity because negotiations have not been finalized.
The German-American company announced Feb. 14 that all options are open for its troubled U.S. operations, which lost $1.5-billion last year and are undergoing a restructuring plan that will shed 13, 000 jobs.
Among the other companies reportedly interested in Chrysler are Canadian auto parts supplier Magna International Inc., a consortium of investors led by Blackstone Group, and General Motors Corp. Billionaire investor Kirk Kerkorian, who tried to take control of Chrysler in the 1990s, also has said he would make a bid.
The Wall Street Journal reported Sunday that Cerberus would keep Chrysler chief executive Tom LaSorda in place, while former Chrysler chief operating officer Wolfgang Bernhard could get a board seat. Cerberus has retained Bernhard as an adviser.
The Wall Street Journal also reported that key to the deal is who picks up Chrysler's staggering health care liabilities for hourly retirees, estimated at $19-billion.
Last year, GM sold a majority stake in its General Motors Acceptance Corp. financing arm to a consortium of investors led by Cerberus for about $14-billion. Analysts have said buying a big stake in Chrysler could be attractive to Cerberus because it could combine GMAC operations with Chrysler Financial.