Posted on 02/23/2007 10:42:55 AM PST by decimon
NEW YORK (Reuters) - At least four private equity groups have been in preliminary talks with DaimlerChrysler AG (DCXGn.DE) about buying Chrysler, the Financial Times reported on Friday on its website. ADVERTISEMENT
Apollo Management LP, the Blackstone Group, the Carlyle Group, and Cerberus Capital Management LP, as well as several European firms, were contacted about their potential interest in buying the company's loss-making U.S. arm, the paper said, citing people familiar with the matter.
The buyout firms were contacted before last week's announcement by DaimlerChrysler that "all options are on the table" for the unit, the paper said, adding that the discussions continued after the announcement.
In New York Apollo, Blackstone, Carlyle and Cerberus could not immediately be reached.
Private equity firms typically look at breakup value. Chrysler has the Hemi engine and Jeep, but not much else that would be sold off for cash.
And the Hemi really isn't anything other than a marketing ploy.
The Ford Escort and the early years of the Ford Focus had their old CVH engine - that had a hemispherical combustion chamber. So did the Corolla if you go far back enough.
Chrysler just has the trademark. And people fall for the idea that a "Hemi" is somehow superior....
A. Start with a very large fortune.
Any deal that can't break the UAW won't accomplish a thing, in the long run. Same economy, same market, same country, but Toyota's making money, and better cars, with non-union plants.
According to some, like Dave Zatz at allpar.com, Chrysler was profitable and had some 8 billion in the bank at the time of the merger.
The scenario I read in WSJ that made the most sense was that the vcap guys would carve Chrysler up thusly:
Jeep to Honda
Dodge truck to Nissan
Cars to a China buyer (they make a heroic appearance to save an American icon from extinction)
Chrysler's pension fund is overfunded. The health care liabilities would be paid off fractionally to the union as Goodyear has just done - with the alternative being Chap 11 and take your chances.
I know it's just sentimentality but I'd hate to see Chrysler go out that way.
KKR is also looking at the Texas Electric Utility TXU. Could potentially be the biggest LBO in history.
Me too and I work for GM, LOL
It's painful to see the big 3 decline.
Some of it is self inflicted, some trade policy, some union greed, yadda yadda.
What a lot of folks on FR fail to realize is that this decline is driving midwest Reagan Democrats to vote Democratic again - with a terrible result. 2006 was a good example.
Nobody seems to remember that Reagan put tariffs on Japanese bikes to help out Harley Davidson.
Nobody seems to remember that NAFTA was his brainchild, either.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.